Inspection of records and retrospective procedural paper book rules were upheld in transferred proceedings, with inadmissible material excluded.

An assessee's right to inspect relevant records was recognised, but the Tribunal held that inspection should ordinarily be sought first from the authority in custody of the records, with Tribunal intervention only if access is refused; the lower authorities were directed to permit inspection in accordance with law, subject to confidentiality for privileged documents. The Tribunal also held that procedural paper book requirements could apply retrospectively to transferred proceedings, so the respondents were allowed to file a paper book, but inadmissible material in it could not be treated as part of the record or considered on that basis.

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Issues: (i) Whether the applicants were entitled to inspection of the relevant records and the Tribunal could direct inspection in the circumstances of transferred proceedings. (ii) Whether the respondents were entitled to file a paper book in transferred matters and whether the objection to its filing could be sustained.

Issue (i): Whether the applicants were entitled to inspection of the relevant records and the Tribunal could direct inspection in the circumstances of transferred proceedings.

Analysis: The right of an assessee to inspect relevant material used against him was recognised, but the Tribunal held that its own intervention was appropriate only where the lower authorities in custody of the records declined inspection. The applicants had not first pursued inspection before those authorities. The Tribunal therefore considered it proper to direct the lower authorities to permit inspection in accordance with law, while preserving the respondents' privilege in relation to confidential documents.

Conclusion: The applicants were held entitled to inspection of relevant records, and the lower authorities were directed to afford such inspection in accordance with law.

Issue (ii): Whether the respondents were entitled to file a paper book in transferred matters and whether the objection to its filing could be sustained.

Analysis: The proceedings had been transferred from revision under the erstwhile statutory regime to the Tribunal, and the paper book requirements under the CEGAT procedure rules were procedural in character. The Tribunal held that procedural amendments could apply retrospectively. At the same time, inclusion of inadmissible material in a paper book could not make such material part of the record.

Conclusion: The respondents were permitted to file a paper book, subject to exclusion of inadmissible material from consideration.

Final Conclusion: The applications succeeded only to the extent that inspection of relevant records was ordered, while the objection to the respondents' paper book was not accepted in principle.

Ratio Decidendi: A procedural amendment governing appellate procedure may apply retrospectively to transferred proceedings, and an applicant's entitlement to inspect records should ordinarily be worked out first before the authority in custody of those records, with Tribunal intervention following refusal if necessary.

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