Natural justice breach in ex parte Tribunal proceedings led to quashing and remand for fresh hearing on merits.

An ex parte Tribunal order passed without a fresh notice of hearing, and the later order rejecting recall, were held unsustainable because the assessee had not been given a reasonable opportunity to be heard. The breach of audi alteram partem vitiated the proceedings, so both orders were quashed and the matter was remanded to the Tribunal for fresh adjudication after proper hearing. The substantive question of service tax liability was left open to be decided afresh on merits.

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Issues: Whether the ex parte order of the Tribunal and the order dismissing the recall application were liable to be set aside for violation of principles of natural justice due to lack of proper opportunity of hearing.

Analysis: The appeal before the Tribunal was heard and decided in the absence of the assessee. The record showed that no fresh notice of hearing was received by the assessee, and the recall application was also dismissed without curing the denial of opportunity. Since an adverse order had been passed without affording a reasonable chance to present the case, the proceedings stood vitiated by breach of the audi alteram partem rule.

Conclusion: The ex parte order and the order rejecting recall were unsustainable and were quashed; the matter was remanded to the Tribunal for fresh decision after giving the assessee an opportunity of hearing.

Final Conclusion: The dispute was sent back for rehearing on merits, and the question of service tax liability was left to be decided afresh by the Tribunal.

Ratio Decidendi: An adverse quasi-judicial order passed without reasonable notice and opportunity of hearing violates natural justice and must be set aside, with the matter remitted for fresh adjudication.

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