Natural justice in tax assessment requires disclosure of relied-upon material before revising assessment and making a decision.

Assessment orders were vitiated because the tax authority relied on audit materials and alleged unreported purchase particulars without furnishing the relied-upon documents to the assessee or granting an effective opportunity to respond. In a quasi-judicial assessment, independent application of mind and disclosure of the material forming the basis of revision are required; failure to supply the bill-wise and date-wise particulars and the audit report amounted to breach of natural justice. The assessments were therefore quashed and the matter remanded for fresh adjudication after disclosure of the materials and grant of personal hearing.

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Issues: Whether the assessment orders passed under Section 27 of the Tamil Nadu Value Added Tax Act, 2006 were liable to be quashed for violation of natural justice on account of non-furnishing of the relied-upon documents and failure to give adequate opportunity.

Analysis: The challenge was based on the allegation that the assessing authority had proceeded mechanically on the audit report and had not supplied the bill-wise and date-wise particulars of the alleged unreported purchases, though those particulars formed the foundation of the revision of assessment. The materials showed that the petitioner had sought those particulars in reply to the revision notices and that the relied-upon audit report was not furnished. In a quasi-judicial assessment, the authority was required to make an independent consideration and to supply the documents on which reliance was placed before deciding the matter.

Conclusion: The assessment orders were passed in violation of the principles of natural justice and were liable to be quashed. The matter was remanded for fresh consideration after furnishing the relied-upon materials and granting adequate opportunity, including personal hearing.

Final Conclusion: The challenge succeeded to the extent of setting aside the impugned assessments and sending the matter back for de novo adjudication in accordance with law.

Ratio Decidendi: Where a tax assessment is founded on material not furnished to the assessee, the order is vitiated for breach of natural justice and must be set aside with a direction for fresh adjudication after disclosure of the relied-upon documents and grant of effective hearing.

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