Natural justice in reassessment upheld where repeated non-production of books justified ex parte assessment and reliance on seized material.

Where a dealer withholds regular books of account despite repeated opportunities, the assessing authority may insist on their production before supplying certified copies of seized documents and reopening reasons, because prior disclosure could facilitate manipulation of records. The Orissa HC held that the assessee was given reasonable opportunity, so the ex parte assessment did not violate natural justice. It further found that the order contained adequate recorded basis for escaped turnover and tax, including reliance on the inspection report and seized documents. The Court therefore declined to set aside the assessment, direct return of the seized material, or grant fallback liberty to appeal after writ adjudication on merits.

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Issues: (i) Whether the Assessing Officer was justified in insisting upon production of the books of account before supplying certified copies of the seized documents and the reasons for reopening the assessment; (ii) Whether reasonable opportunity of hearing was afforded and the principles of natural justice were complied with before passing the assessment order ex parte; (iii) Whether the assessment order contained adequate basis and reasoning for determination of escaped turnover and tax, and whether reliance on the inspection report was justified; (iv) Whether the ex parte assessment order should be set aside with a direction to return the seized documents and redo the assessment; (v) Whether liberty could be granted to the petitioner to prefer an appeal if it failed in the writ petition.

Issue (i): Whether the Assessing Officer was justified in insisting upon production of the books of account before supplying certified copies of the seized documents and the reasons for reopening the assessment.

Analysis: The petitioner had not produced its regular books of account at the time of inspection or before the Assessing Officer despite repeated opportunities. The seized documents were relied upon for initiating reassessment, and the Court held that disclosure of those materials before production of the regular books could facilitate manipulation of accounts. The demand for prior production of books was therefore treated as legally permissible, and the request to make supply of copies and reasons a pre-condition to production of books was rejected.

Conclusion: The insistence on production of books of account before supply of the seized documents and reopening reasons was upheld, against the petitioner.

Issue (ii): Whether reasonable opportunity of hearing was afforded and the principles of natural justice were complied with before passing the assessment order ex parte.

Analysis: The petitioner was heard at the inspection stage and again after initiation of reassessment under the statutory notice. Multiple adjournments and intimation notices were issued, yet the petitioner did not produce the books of account. The Court held that the opportunities granted were adequate and that the petitioner's non-cooperation justified the ex parte course adopted by the Assessing Officer.

Conclusion: Reasonable opportunity was held to have been afforded and the ex parte assessment was sustained, against the petitioner.

Issue (iii): Whether the assessment order contained adequate basis and reasoning for determination of escaped turnover and tax, and whether reliance on the inspection report was justified.

Analysis: The assessment order recorded the factual basis from the inspection, the seized documents, the repeated defaults in producing accounts, and the conclusion that the transactions reflected suppressed turnover. The Court held that an assessing authority is not required to repeat all reasoning afresh where it concurs with the inspection findings and has no additional material to add. The order was found to contain sufficient reasons and to satisfy the statutory requirement of recorded basis.

Conclusion: The assessment order was held to contain adequate reasoning, and reliance on the inspection report was upheld, against the petitioner.

Issue (iv): Whether the ex parte assessment order should be set aside with a direction to return the seized documents and redo the assessment.

Analysis: The Court held that setting aside the ex parte order would prejudice the State because the petitioner had repeatedly refused to produce its books of account and had sought disclosure of the seized materials only after the assessment process began. On the facts, a remand would defeat the purpose of the inspection and allow possible manipulation of records. The Court therefore declined to interfere with the ex parte assessment or to direct return of the seized documents for a fresh round of assessment.

Conclusion: The request to set aside the ex parte assessment and redo the assessment was rejected, against the petitioner.

Issue (v): Whether liberty could be granted to the petitioner to prefer an appeal if it failed in the writ petition.

Analysis: The Court held that once it adjudicates the assessment order on merits in writ jurisdiction, granting liberty to pursue the statutory appeal as an alternative fallback would be misconceived. The petitioner did not seek withdrawal of the writ petition and instead pressed the merits, so the requested liberty was refused.

Conclusion: Liberty to prefer an appeal after adjudication on merits was declined, against the petitioner.

Final Conclusion: The assessment proceedings were held to be lawful, the ex parte order was sustained, and no interference was warranted in writ jurisdiction.

Ratio Decidendi: Where a dealer withholds regular books of account despite repeated statutory opportunities, the assessing authority may insist on their production before disclosing seized incriminating material, and an ex parte best-judgment assessment based on such material will not be interfered with if reasonable opportunity and recorded reasons are shown.

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