Natural justice in fiscal adjudication limits revival of dormant notices and requires cross-examination of relied-upon witnesses.

Long-dormant show-cause notices could not be revived after years without a satisfactory explanation, as unexplained delay caused serious prejudice and offended fair adjudicatory process; the adjudication founded on those notices was set aside. Adjudication based substantially on witness statements also could not stand where the assessee was denied cross-examination of the relied-upon witnesses, because reliance on untested statements breached natural justice; that matter was remanded for fresh consideration with cross-examination opportunity where relied upon.

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Issues: (i) Whether dormant show-cause notices could be reactivated after a long lapse of time and the resulting adjudication sustained; (ii) Whether the adjudication based on witness statements could stand when cross-examination of the relied-upon witnesses was denied.

Issue (i): Whether dormant show-cause notices could be reactivated after a long lapse of time and the resulting adjudication sustained.

Analysis: The earlier notices had remained in abeyance for years and were later revived without any satisfactory explanation for the delay. Such unexplained revival, especially after a long interval, was treated as causing serious prejudice to the assessee and as being inconsistent with fair adjudicatory process. The Court applied the principle that proceedings cannot be kept dormant indefinitely and then resumed to the detriment of the assessee without a legally sustainable basis.

Conclusion: The challenge to the adjudication arising from the dormant notices succeeded, and that part of the impugned order was set aside in favour of the assessee.

Issue (ii): Whether the adjudication based on witness statements could stand when cross-examination of the relied-upon witnesses was denied.

Analysis: The impugned adjudication substantially relied upon statements of witnesses who were not made available for cross-examination despite a specific request. Reliance on such statements without affording cross-examination amounted to a breach of natural justice. Since the statements formed an important basis of the findings, the adjudication on that notice could not be sustained and required reconsideration with cross-examination opportunity.

Conclusion: The adjudication on the later notice was set aside and remanded for fresh consideration in favour of the assessee.

Final Conclusion: The petition succeeded in part. The impugned order was quashed insofar as it related to the dormant notices, and the remaining matter was remitted for fresh adjudication after granting cross-examination where relied upon.

Ratio Decidendi: Revival of long-dormant fiscal adjudication without satisfactory explanation and adjudication based on untested witness statements, where cross-examination is denied, violates natural justice and cannot be sustained.

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