Natural justice requires disclosure of relied-upon subordinate reports before appellate or revisional decisions are made.

Appellate and revisional authorities must furnish an assessee with subordinate reports obtained and relied upon in deciding an appeal or revision. The authorities cannot unilaterally treat such material as merely formal or decide prejudice without disclosure, because fairness requires an effective opportunity to meet every document used in the decision-making process. Failure to supply the reports despite request amounted to breach of natural justice, rendering the orders liable to be set aside in favour of the assessee.

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Issues: Whether the appellate and revisional orders were vitiated for failure to furnish to the assessee the subordinate reports called for and relied upon in dealing with the appeal and revision, thereby violating the principles of natural justice.

Analysis: The authorities had called for reports from their subordinates on the grounds of appeal and revision, but those reports were not supplied to the assessee despite request. The question whether the reports were merely formal or whether they caused prejudice was not for the authorities to decide unilaterally. Once such material was obtained for consideration in the decision-making process, fairness required that copies be furnished to the assessee so that an effective opportunity to meet them could be afforded.

Conclusion: The orders were vitiated by breach of natural justice and were liable to be set aside in favour of the assessee.

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