Natural justice in valuation assessment requires disclosure of relied-on material and recorded reasons before finalisation.

An assessment finalised on undisclosed cost accountant material and without recorded reasons for the adopted valuation method cannot be sustained, because it denies the assessee a fair opportunity and makes the order non-speaking. Where valuation is completed under Rule 11 of the Valuation Rules, 2000, the report relied on must be supplied and the basis for adopting the valuation approach must be explained. The assessment was set aside and remanded for de novo adjudication after furnishing the report to the assessee and complying with natural justice.

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Issues: Whether the assessment finalised on the basis of the cost accountant's report, without supplying that report to the assessee and without recording reasons for the adopted valuation method, could be sustained.

Analysis: The revenue had sought cost data from the assessee, but the material relied upon for finalisation was not furnished to the assessee before assessment. The adopted figure of 110 to 115 per cent of the highest market price was also not supported by any recorded reasoning. Since the assessment was finalised under Rule 11 of the Valuation Rules, 2000, the absence of disclosure of the report and the absence of reasons for valuation resulted in denial of fair opportunity and rendered the order unsustainable.

Conclusion: The assessment order was unsustainable for violation of natural justice and for being a non-speaking order. The matter was remanded for de novo adjudication after supplying the report to the assessee.

Ratio Decidendi: An assessment based on undisclosed material and unreasoned adoption of a valuation method cannot be sustained and must be set aside for fresh adjudication after compliance with natural justice.

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