Fair disclosure in tax assessment requires supply of relied-on purchase details before denying rectification and remitting the matter.

A Kerala HC decision under the Kerala Value Added Tax Act, 2003 addressed whether an assessment based on inter-State purchase figures could stand where the assessee was not satisfactorily shown to have received the material relied on by the assessing authority. The record did not prove service of the soft copy of purchase details, and the assessee was not given an effective chance to reconcile the figures. In those circumstances, rejection of rectification did not cure the disclosure defect. The refusal to entertain rectification was set aside, and the matter was remitted for fresh consideration after supplying the relevant purchase details and giving the assessee an opportunity to respond.

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Issues: Whether the assessment order and the order rejecting rectification were liable to be interfered with for want of proper disclosure of the material relied on for determining inter-State purchases and for failure to give the assessee an effective opportunity to reconcile the figures.

Analysis: The dispute arose from an assessment under Section 25 of the Kerala Value Added Tax Act, 2003, followed by a rectification request alleging errors in the computation of inter-State purchases and related findings. The record did not satisfactorily establish that the assessee had been furnished with the soft copy of the purchase details relied on by the assessing authority, and the authority itself was unable to produce proof of such service. In that situation, the rejection of rectification without addressing the assessee's grievance on disclosure and reconciliation did not adequately cure the procedural deficiency. The appropriate course was to ensure supply of the material relied on and to afford a further opportunity to respond.

Conclusion: The refusal to entertain rectification was set aside and the matter was remitted for fresh consideration after supplying the relevant purchase details and granting an opportunity to the assessee.

Ratio Decidendi: Where the material relied on for an assessment is not satisfactorily shown to have been supplied to the assessee, rectification or reconsideration may be warranted to preserve a fair opportunity to meet the assessment.

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