Natural justice bars assessment orders from relying on grounds not set out in the show-cause notice.

Reversal of input tax credit was unsustainable because the assessment order relied on statutory provisions not proposed in the show-cause notice. The notices proceeded only on alleged non-production of C Forms, and once those forms were produced the concessional rate issue stood accepted. The assessing authority then introduced a different basis under Sections 19(2)(v) and 19(5)(a) of the Tamil Nadu Value Added Tax Act, 2006 without prior notice. That departure denied the dealer a fair opportunity to meet the case against it and violated natural justice, so the writ appeals failed.

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Issues: Whether reversal of input tax credit could be sustained when the show-cause notice did not propose reversal on the grounds ultimately relied upon in the assessment order.

Analysis: The assessment notices proposed revision only on the ground of non-production of C Forms. After the dealer produced the C Forms and the concessional rate issue stood accepted, the assessing authority nevertheless reversed input tax credit by invoking different provisions, namely Section 19(2)(v) and Section 19(5)(a) of the Tamil Nadu Value Added Tax Act, 2006. A final order cannot travel beyond the scope of the proposal put to the assessee, because the assessee must be given a fair opportunity to meet the precise case against it. Since the impugned orders introduced a new basis without prior notice, the action was contrary to natural justice.

Conclusion: The reversal of input tax credit was unsustainable for want of notice, and the writ appeals failed.

Ratio Decidendi: An assessment order cannot rest on a ground not proposed in the show-cause notice, and any such deviation violates natural justice.

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