Natural justice requires disclosure of vigilance material before assessment; undisclosed reports cannot sustain the order.

An assessment founded on vigilance or enforcement material cannot be sustained unless the material relied upon is furnished to the assessee and an effective opportunity is given to object before finalisation. Denial of the vigilance report and supporting material deprived the assessee of a meaningful chance to meet the case and amounted to a breach of natural justice, so the assessment was set aside. The matter was remitted to the assessing authority for fresh consideration after disclosure of the relied-upon material, and the limitation issue was left open to be raised before that authority.

---

---

Issues: (i) whether the assessment order could be sustained when the vigilance report and material relied upon by the assessing authority were not furnished to the assessee; and (ii) whether the limitation issue required adjudication in view of the remand.

Issue (i): whether the assessment order could be sustained when the vigilance report and material relied upon by the assessing authority were not furnished to the assessee.

Analysis: The assessment was founded on the report of the Regional Vigilance and Enforcement Department. Where an order is based on such material, fairness requires that the assessee be supplied with the material and be given an opportunity to object before the assessment is finalised. Denial of the report deprived the assessee of a meaningful opportunity to meet the case against it and amounted to violation of natural justice. The cited Division Bench decisions were applied to hold that an assessment based on undisclosed vigilance material cannot stand.

Conclusion: The assessment order was unsustainable for non-supply of the vigilance report and was liable to be set aside in favour of the petitioner.

Final Conclusion: The writ petition succeeded on the ground of violation of natural justice, the assessment was set aside, and the matter was remitted to the assessing authority for fresh consideration after furnishing the relied-upon vigilance material. The limitation question was left open to be urged before the authority.

Ratio Decidendi: When an assessment is based on vigilance or enforcement material, that material must be furnished to the assessee before finalisation of the assessment, failing which the order is vitiated for breach of natural justice.

---