That's interesting, most epoxies if used as a sealer aren't meant to be sanded which is not to say they can't be, just that it doesn't hide sanding scratches as well as a high build primer does. The recoat window of 48 hours means you can recoat it without sanding within that time, after 48 hours you must sand, so it's up to you whether you do or not in this case. I usually do sand just so I have as perfect a surface for my topcoat as I can get. If the tech sheet says 320 - 400 I would have to assume that's fine. Also depends on the type of paper you get, I think most of the paper down in the States is CAMI grit where as we have a lot of P grit, kind of like a metric to imperial thing so 320 CAMI is about 400 P and 400 CAMI is almost 800P.