Third-party material in reassessment requires disclosure and cross-examination before finalising the assessment.

A revised assessment based on third-party material cannot be sustained unless the assessee is given the relied-upon documents and a meaningful opportunity to cross-examine the person whose statements are used. Section 81 of the TNVAT Act, 2006 permits summoning witnesses and compelling attendance, and that procedure must be followed where third-party evidence drives the assessment. As the third party was not produced for cross-examination and the prescribed process was not observed, the assessment was vulnerable for procedural unfairness. The impugned order was set aside and the matter remanded for fresh consideration in accordance with law.

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Issues: Whether the assessment order was liable to be set aside for failure to furnish the relied-upon documents and to secure the presence of the third party for cross-examination before finalising the revised assessment.

Analysis: Section 81 of the TNVAT Act, 2006 empowers the assessing authority to summon witnesses and compel attendance for examination. Where the assessment is proposed to be revised on the basis of material from a third party, the assessee must be afforded a meaningful opportunity to test that material, including access to the relevant documents and the opportunity to cross-examine the person whose statements are relied upon. In the present case, the third party was not produced for cross-examination and the procedure contemplated under the Act was not followed, leaving the assessment vulnerable on the ground of procedural unfairness.

Conclusion: The impugned order was set aside and the matter was remanded to the respondent for fresh consideration in accordance with law, after following the procedure for summoning witnesses and enabling cross-examination. The decision is in favour of the assessee.

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