Natural justice requires disclosure of adverse material; adjudication based on an undisclosed report was vitiated and remanded.

An adjudication based on an undisclosed post-hearing report violated natural justice because adverse material used against the assessee was not furnished and could not be contested. The fairness defect vitiated the adjudication itself, so the merits were not examined. The matter was remanded to the jurisdictional adjudicating authority to supply the report, consider objections, and pass a fresh decision after hearing the assessee.

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Issues: Whether the order of adjudication, based on a report not supplied to the assessee and not put to challenge, was vitiated for breach of natural justice, and whether the matter should be remanded.

Analysis: The order was founded on a report obtained after the personal hearing, but no copy of that report was furnished to the assessee and no opportunity was given to contest its findings. Where adverse material is relied upon against a taxpayer, fairness requires that the material be disclosed and an opportunity afforded to meet it. The defect went to the fairness of the adjudication itself, so the merits were not examined.

Conclusion: The adjudication was vitiated by breach of the principles of natural justice, and the matter was remanded to the jurisdictional adjudicating authority for supply of the report, consideration of objections, and fresh decision after hearing the assessee.

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