Natural justice in tax revision: undisclosed material and no effective hearing led to setting aside the assessment order.

An assessment or revisional order based on material not furnished to the dealer, and passed without a meaningful opportunity of hearing, breaches natural justice and cannot be sustained. The court noted that the revision procedure and the governing circular required notice and hearing before reassessment or revision, and that reliance on an undisclosed web-report deprived the dealer of a fair chance to respond. The availability of an alternative remedy did not prevent interference. The impugned order was set aside and the matter remanded to the assessing authority for fresh consideration in accordance with law and the prescribed procedure.

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Issues: Whether the assessment and revisional proceedings could be sustained when the report relied upon by the assessing authority was not furnished to the dealer and no effective opportunity of hearing was afforded before passing the impugned order.

Analysis: The assessment order proceeded on the basis of a web-report, but the dealer was not supplied a copy of that material. The circular governing revision of assessment required compliance with the opportunity requirements under the Act, including notice and hearing before revision. In these circumstances, the Court held that the order was passed in breach of the requirement of fair hearing and that the existence of an alternative remedy did not bar interference.

Conclusion: The impugned assessment order could not be sustained and was set aside. The matter was remanded to the assessing authority for fresh consideration in accordance with law after following the prescribed procedure and the circular.

Ratio Decidendi: An assessment or revisional order founded on material not furnished to the dealer, without affording a reasonable opportunity of hearing, is liable to be set aside for violation of natural justice notwithstanding the availability of an alternative remedy.

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