K.M. Lahiri, J.
1. In exercise of the powers under Section 32(2) of the Assam Sales Tax Act, 1947 (Assam Act 17 of 1947), the learned Board of Revenue has referred the following questions of law for opinion of this Court:
(1) Whether on the facts and in the circumstances of the case, the Board of Revenue was correct in law in holding that the power under Section 31(1) of the Act could be invoked in the instant cases and the orders of assessment passed by the Superintendent of Taxes could be revised in exercise of powers under Section 31(1) of the Act on the basis of the materials and legal evidence already on record at the time of original assessment proceedings ?
(2) Whether on the facts and in the circumstances of the case, the Board of Revenue was correct in law in deciding the appeal against the order passed under Section 31(1) of the Act on the report of the Inspector of Taxes and other materials which were not there on record in the original assessment proceedings ?
(3) Whether on the facts and in the circumstances of the case, the order passed by the Board of Revenue was vitiated in law for consideration of the report of the Inspector of Taxes dated 18th December, 1972, submitted to the Superintendent of Taxes without giving any opportunity to the assessee to meet the contents of the said report ?
2. The relevant facts are set out below:
The Superintendent of Taxes, Kamrup, Gauhati, completed the assessment of the petitioner-firm, M/s. Radhakrishna Oil and Rice Mills, Gauhati, hereinafter referred to as 'the dealer' for the period 13th September, 1964, to 30th September, 1969, under Section 17(3) of the Assam Sales Tax Act, 1947- 'the Act' for short. The dealer paid the assessed amount. Thereafter, by an order dated 3rd December, 1973, the Commissioner of Taxes, Gauhati, in exercise of the powers under Section 31(1) of 'the Act' revised the assessment made by the Superintendent of Taxes for the reason that the value of containers of mustard oil was 'wrongly exempted from assessment'. The dealer was served with notice. The dealer approached this Court in an application tinder Article 226 of the Constitution questioning the jurisdiction of the Commissioner of Taxes. However, by judgment and order dated 2nd February, 1973, this Court, in Civil Rules Nos. 704, 724 and 733 of 1972, held that the Commissioner of Taxes had jurisdiction to proceed under Section 31(1) of 'the Act'. In those Civil Rules the main contention of the petitioner was that the Commissioner had jurisdiction to assess or reassess under Section 19A(1) of 'the Act' but he had no jurisdiction to entertain any revision under Section 31(1) of 'the Act'. The petitioner also questioned the validity of the notices dated 19th September, 1972, issued by the Superintendent on the ground that the proceedings under Section 31(1) of 'the Act' were entertained by the Superintendent and not by the Commissioner which the former had no jurisdiction vested in him by or under the law. Both the contentions were turned down by this Court. Thereafter, the dealer appeared before the Commissioner and upon hearing the dealer the Commissioner by his order dated 3rd December, 1973, held that the earlier assessment for the periods in question were erroneous and directed the Superintendent of Taxes to make fresh assessment in the light of the findings arrived at by the Commissioner of Taxes. The dealer preferred appeals before the Assam Board of Revenue, Gauhati, and took up various points. The Board, inter alia, held:
It is true that the mustard oil was sold in net weight. Records however disclose that the appellant sold loose mustard oil at a cheaper rate but he sold the mustard oil with containers at a higher rate. In this connection, the report of the Inspector of Taxes, Mr. M.L. Chetia, dated 18th December, 1972, to the Superintendent of Taxes may be referred to.
Sri P.C. Das, learned Member of 'the Board' upheld the order of the Commissioner. As a sequel to this, the dealer asked for and obtained an order of reference of the three questions of law.
3. We propose to answer questions Nos. (2) and (3). The following facts have not been disputed before us :
(i) That the report of the Inspector of Taxes, Mr. M.L. Chetia, dated 18th December, 1972, submitted to the Superintendent of Taxes was the sheet-anchor or the base of order of 'the Board', namely, that the containers were sold by the dealer;
(ii) that apart from the said 'report' there was no other material before the Board to reach the conclusion that the dealer had sold loose mustard oil at a cheaper rate whereas it sold mustard oil with containers at a higher rate ;
(iii) that if the containers were not sold by the dealer, it could not have been made liable to pay tax under 'the Act' ;
(iv) that the dealer had contended that the containers were never sold whereas the case of the department was that the containers were also sold and price charged and realised by 'the dealer' ;
(v) that the appellate authority had before it two questions : (i) whether the dealer intended to sell and the buyer intended to purchase the containers ; and (ii) whether the subject-matter of sale was only mustard oil and the containers did not form part of the bargain at all, but were used by the sellers as a convenient and cheap vehicle of transport.
4. In this back-drop let us answer questions Nos. (2) and (3). The prime question is whether the report of the Inspector could have been used by the Board as 'fresh evidence'. Admittedly, the report was never taken as a material or evidence by the Commissioner and it was used for the first time by the Board. The ambit of the power to take fresh evidence can be located in Regulation 17 of the Assam Board of Revenue Regulations, 1963, framed under the Assam Board of Revenue Act, 1962. The provisions of Regulation 17 are set out:
17. Fresh evidence.-(1) No party to an appeal or an application shall be entitled to adduce fresh evidence, whether oral or documentary, before the Board. The Board may, however, at any stage accept documents tendered by a party or call for any documents, if it is of opinion that they are necessary for deciding the appeal or application, provided that the other party shall in that case' be entitled to produce rebutting evidence.
(2) A party desiring to produce such documents or affidavit shall file three copies of the same on a date at least seven days ahead of the date of hearing and shall at the same time serve an additional copy thereof on each of the respondents or opposite parties.
(3) The Board may direct any authority against whose order an appeal or application is made, to make such further investigation or to take additional evidence directly or through any subordinate authority as it may think necessary.
(4) Where fresh evidence has been adduced under Sub-regulation (1) or a further investigation is made or additional evidence is taken under Sub-regulation (3), the parties shall be entitled to address the Board on points arising out of the fresh or additional evidence or further investigation.
It will be seen that ordinarily no party is entitled to adduce fresh evidence, whether oral or documentary. However, the Board may, at any stage, accept any document tendered by a party or call for documents if it is of the opinion that they are necessary for deciding the appeal. However the other party must be afforded opportunity to produce rebutting evidence. It follows, therefore, that Regulation 17(1) contemplates three conditions. First, the document must be produced or tendered by a party to the appeal. Secondly, the Board must be of the opinion that the document is necessary. Thirdly, the other party must be provided reasonable opportunity to produce rebutting evidence. Regulation 17(2) of the Regulations provides the procedure for tendering documents or affidavit as evidence. It provides that a party desiring to produce documents must file three copies of the documents at least seven days before the date of hearing of the appeal and serve it on the respondents or opposite parties. None of the conditions set forth in Regulation 17(1) and (2) was complied as the report was not tendered by the respondents.
5. The report of the Inspector of Taxes dated 18th December, 1972, was suo motu used as evidence for the first time by the Board without affording any opportunity to the appellant to produce any rebutting evidence. The provisions of Regulation 17 do not indicate that the Board can suo motu admit and make use of a document which was not placed before the original authority. The Board of Revenue clearly admitted that the report of the Inspector of Taxes and other materials were not on record in the original assessment proceeding, vide question No. (2). It also appears from 'the statement of case' that the report in question was admitted and made use of by the Board without giving any opportunity to the dealer to meet the contents thereof.
6. On these admitted facts, we have no hesitation in answering that the Board of Revenue, a statutory authority, could not suo motu admit and make use of documents as fresh evidence in appeal without affording reasonable opportunity to the other party, the appellants before the Board. It is violative of the principles of natural justice. It is manifestly clear that the action of 'the Board' in admitting and using the report as 'fresh evidence' was violative of Regulation 17 of the Regulations. The dealer was prejudiced thereby as it did not get any opportunity to produce any rebutting evidence or could adduce any fresh evidence. Situated thus, we answer that on the facts and circumstances of the case, the order passed by the Board of Revenue was bad in law as it took into consideration the report of the Inspector of Taxes dated 18th December, 1972, without giving any opportunity to the dealer. It was violative of the principles of natural justice as well as violative of Regulation 17 of the Regulations. Accordingly, we answer question No. (3) in the affirmative, namely, that the orders of the Board are bad in law on those counts.
7. In so far as question No. (2) is concerned, our answer to the question is in the negative for the reasons alluded. That apart, the report was not filed by any of the parties to the proceedings. It could not have been made use of by the parties to the proceedings in derogation of the mandates of Regulation 17 of the Regulations. As such, the Board was incompetent to consider the said report. The Board could have made use of the document under Regulation 17(3) and (4) of the Regulations. In the absence of due compliance with the provisions of Regulation 17(3) and (4), the Board committed errors of law in acting on the report, in exercise of its purported jurisdiction under Regulation 17. For the foregoing discussions we hold that on the facts and in the circumstances of the case, the Board of Revenue erred in law in deciding the appeal on the report of the Inspector of Taxes and other materials, which were not on record in the original assessment proceedings.
8. In so far as question No. (1) is concerned, we are of the opinion that it need not be answered as the parties will get ample opportunity to argue the question, and agitate it before the learned Board. In view of our answers to questions Nos. (2) and (3), the entire matter will be open for argument and if any of the parties adduces any fresh evidence, the learned Board may entertain the same complying with the provisions of Regulation 17 and hearing the parties. The learned Board shall undoubtedly take into consideration the decisions in Commissioner of Taxes, Assam v. Prabhat Marketing Co. Ltd. AIR 1967 SC 602, Hyderabad Deccan Cigarette Factory v. State of Andhra Pradesh  17 STC 624 (SC), Sewlal Hazarimal v. Commissioner of Taxes, Assam 1979 Tax LR 767 and The Martand Dairy & Farm v. Union of India 1975 UJ (SC) 431. We are confident that the Board of Revenue will also take into consideration the provisions of Section 2(12) and 2(13) of the Assam Sales Tax Act and decide the appeals on merits. We answer question No. (1) accordingly.
9. Let a copy of this judgment be sent to the Assam Board of Revenue under the seal of the Court and signature of the Registrar. The learned Board of Revenue shall, on receipt of the copy of the judgment, order disposal of the appeals accordingly.