Natural justice in demand adjudication: denial of record inspection and cross-examination led to remand for fresh decision.

A demand based on departmental sales tax records, Form 39, ST records and barrier movement registers was found unsustainable because the relevant material was voluminous, not properly inspected, and cross-examination of truck drivers was denied. These defects were treated as a breach of natural justice. The impugned order was set aside and the matter was remanded for de novo adjudication, with directions to provide a reasonable opportunity of hearing, supply the necessary records and allow cross-examination of the specified persons.

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Issues: Whether the demand, being based on departmental records and movement registers, could be sustained when the relevant records were voluminous, not properly inspected, and cross-examination of the truck drivers was denied, thereby warranting remand for de novo adjudication.

Analysis: The demand was founded on sales tax departmental records, Form 39, ST records, and movement registers maintained at the commercial taxes barrier. The records were voluminous and were not properly inspected. Cross-examination of the truck drivers was also denied. These circumstances constituted violation of the principles of natural justice.

Conclusion: The impugned order was set aside and the matter was remanded to the adjudicating authority for de novo adjudication with directions to grant reasonable opportunity of hearing, supply the requisite records, and permit cross-examination of the persons specified.

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