Third-party material cannot support turnover assessment without effective cross-examination and proper securing of witnesses.

An assessment based on third-party documents and statements cannot be sustained unless the assessee is given a real opportunity to cross-examine the sources of that material. The assessing authority must also fully use its statutory power to secure the attendance of witnesses and production of documents under section 54 of the Tamil Nadu General Sales Tax Act, 1959; merely issuing summons is insufficient. Where the third-party material remains untested without fault of the assessee, it cannot be relied on to fasten liability or enhance turnover, and the assessment is liable to be quashed.

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Issues: Whether an assessment based on third-party documents and statements could be sustained when the assessee was not afforded an effective opportunity to cross-examine the third parties and the assessing authority did not fully exercise its power to secure their attendance and documents.

Analysis: Section 54 of the Tamil Nadu General Sales Tax Act, 1959 confers power on the assessing authority to summon witnesses, compel attendance and require production of documents. Where the proposed assessment rests on materials obtained from third parties, fairness requires that the assessee be given an opportunity to test those materials by cross-examination. Merely issuing summons is insufficient if the authority does not take the statutory steps necessary to secure attendance and production. If the third-party material remains uncontroverted through no fault of the assessee, such material cannot be used to fasten liability or enhance turnover.

Conclusion: The assessment based on untested third-party material was unsustainable and was liable to be quashed in favour of the assessee.

Ratio Decidendi: A turnover determination cannot be founded on third-party documents or statements unless the assessee is given a real opportunity to cross-examine the source of that material, and the assessing authority has adequately used its statutory power to secure such attendance and production.

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