Natural justice in VAT reassessment: denial of input tax credit fell when foundational material was withheld from the assessee.

A reassessment under the Gujarat VAT Act denying input tax credit was challenged on the ground that the assessee was not supplied the foundational material, including the dealer's cancellation order, on which the denial was based. The High Court held that the availability of an appellate remedy does not bar writ jurisdiction where the impugned action is vitiated by breach of natural justice. Because the authority proceeded without disclosing the relevant material and without independently examining the assessee's supporting documents, the assessment could not be sustained. The writ was entertained, the assessment order was quashed, and the matter was remanded for fresh adjudication after supplying the material and granting a fair opportunity.

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Issues: Whether the writ petition challenging reassessment and denial of input tax credit was maintainable despite the availability of an appellate remedy, and whether the impugned assessment could be sustained when the petitioner was not supplied the foundational material on which the denial of input tax credit was based.

Analysis: The petition arose from reassessment under the Gujarat Value Added Tax Act, 2003, where input tax credit was denied largely on the basis of the cancellation of registration of the selling dealer. The Court noted that the petitioner had sought the relevant cancellation order and other connected material, but the authority proceeded without supplying the same and without independently examining the petitioner's supporting documents. Although an alternative appeal was available, the Court held that the rule of alternate remedy is a self-imposed restraint and does not bar writ jurisdiction where there is breach of natural justice. Since the impugned action rested on material withheld from the petitioner and the petitioner's case had not been considered on its own merits, the Court found a clear violation of the principles of natural justice.

Conclusion: The writ petition was entertained and the assessment order was quashed and set aside. The matter was remanded for fresh adjudication after supplying the requested material and affording due opportunity to the petitioner, with the claim to be examined independently on its own merits.

Ratio Decidendi: Availability of an appellate remedy does not preclude writ relief where the impugned action is founded on non-supplied material and is vitiated by breach of natural justice; in such a case, the matter may be remanded for fresh decision after disclosure of the relevant documents and fair opportunity.

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