Natural justice and cross-examination breach led to remand; limitation plea failed on facts, with invoice comparison ordered.

Denial of cross-examination of witnesses whose statements formed a substantial part of the evidentiary basis was treated as a breach of natural justice, and the adjudication was remanded for fresh decision with opportunity to test those statements and consider additional documents. The limitation plea based on absence of allegations of fraud was rejected on the facts because the record contained direct allegations of involvement, including alleged non-receipt of goods and paper transactions. The dispute relating to M/s Asha Traders was also sent back for reconsideration, with directions to compare the impugned invoices with those in the Surat proceedings and vacate the notice if they were identical.

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Issues: (i) Whether denial of cross-examination of witnesses whose statements were relied upon vitiated the adjudication and warranted remand. (ii) Whether the limitation plea based on the absence of allegations of participation in fraud was available on the facts of the case, and whether the related dispute concerning invoices of M/s Asha Traders required fresh consideration.

Issue (i): Whether denial of cross-examination of witnesses whose statements were relied upon vitiated the adjudication and warranted remand.

Analysis: The adjudication was founded substantially on statements recorded during investigation, yet cross-examination was denied without cogent reasons. Such denial was held to be insufficient where the statements formed part of the evidentiary basis. The appellants were also permitted to place additional documents, which had not been produced earlier for want of adequate opportunity.

Conclusion: The denial of cross-examination amounted to breach of natural justice and the matter was required to be remanded for fresh adjudication.

Issue (ii): Whether the limitation plea based on the absence of allegations of participation in fraud was available on the facts of the case, and whether the related dispute concerning invoices of M/s Asha Traders required fresh consideration.

Analysis: The plea founded on the Gujarat High Court decision was distinguished because the present case contained direct allegations of involvement, including alleged non-receipt of goods and paper transactions. For M/s Asha Traders, the invoices in dispute were directed to be compared with those involved in the Surat proceedings, and if they were identical the notice was to be vacated. The limitation contention was not accepted as a final ground of relief in the present factual setting.

Conclusion: The limitation-based challenge was rejected on the facts, while the dispute concerning M/s Asha Traders was also sent back for reconsideration after invoice comparison.

Final Conclusion: The impugned adjudication was set aside and the matters were remanded for fresh decision with opportunity of cross-examination and consideration of additional evidence, resulting in partial relief to the appellants.

Ratio Decidendi: Where the adjudication rests on relied-upon statements, denial of cross-examination without adequate reasons violates natural justice and justifies remand for fresh adjudication.

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