Natural justice breach in rebate adjudication led to setting aside of the order and fresh hearing on remand.

An adjudication order rejecting a rebate claim was set aside because it was passed on the incorrect assumption that no reply had been filed and no personal hearing was sought, despite the reply being on record and undisputed. The court held that failure to consider the reply and to grant a fair hearing violated natural justice, rendering the proceeding procedurally unfair. The merits of the rebate claim were not examined, and the matter was remitted to the adjudicating authority for fresh decision after hearing the petitioner.

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Issues: Whether the adjudication order rejecting the rebate claim was vitiated for breach of natural justice and required to be set aside with a fresh opportunity of hearing.

Analysis: The show cause notice allowed only seven days to reply, the petitioner asserted that the reply had been filed within time, and the counter affidavit did not dispute that filing. The impugned order proceeded on the basis that no reply had been filed and no request for personal hearing had been made. The order was therefore passed without due consideration of the reply and without affording a proper hearing, rendering the adjudication procedurally unfair. The merits of the rebate claim were not examined.

Conclusion: The adjudication order was unsustainable for violation of the principles of natural justice and was set aside, with the matter remitted to the adjudicating authority for fresh decision after hearing the petitioner.

Ratio Decidendi: An adjudication order passed on an incorrect assumption that no reply was filed, despite an undisputed reply on record, is liable to be set aside for breach of natural justice and the matter must be reconsidered after giving a fair hearing.

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