Natural justice in tax revision defeated where undisclosed GIS material supported denial of concessional treatment and exemption.

A revisional order withdrawing concessional tax treatment and denying exemption was set aside because the dealer was not supplied the GIS material relied upon and had no effective opportunity to meet it. The Court held that adverse findings based on undisclosed material violated natural justice, so the assessment/revisional order could not stand. It also noted that if the goods had not crossed the check post, the matter would fall for consideration under the State VAT enactment rather than as an inter-State sale under the CST regime. The matter was remitted for fresh proceedings after disclosure of the relied-upon material and an opportunity to object and be heard.

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Issues: Whether the revisional order withdrawing concessional tax treatment and denying exemption was vitiated for breach of natural justice and required fresh consideration after supplying the material relied upon.

Analysis: The revisional authority relied upon GIS information that was not reflected in the show-cause notice and was not furnished to the dealer. The resulting adverse finding, based on material obtained behind the dealer's back, could not be sustained. The Court also noted that if the goods had not crossed the check post, the matter would fall for consideration under the State VAT enactment and not as an inter-State sale under the Central Sales Tax regime. Since the order had been passed without disclosure of the material relied upon and without affording an effective opportunity to meet it, the assessment/revisional order was liable to be set aside.

Conclusion: The impugned order was set aside for violation of natural justice, and the matter was remitted for fresh proceedings after supplying the relied-upon material and granting an opportunity to object and be heard.

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