Natural justice in adjudication: findings beyond the show cause notice were set aside and the matter remanded for rehearing.

CESTAT Kolkata held that an adjudication cannot sustain findings or liabilities that go beyond the show cause notice. The notice was issued against a partnership concern, but the adjudicating authority treated the appellant as a sole proprietor without notice on that issue and without giving her a proper opportunity to be heard. That departure from the scope of the notice violated natural justice, so the impugned orders were set aside and the matter was remanded for fresh adjudication after a reasonable hearing.

---

---

Issues: Whether the impugned demand and penalties could be sustained when the adjudication travelled beyond the show cause notice and was passed without giving the appellant an opportunity of hearing.

Analysis: The show cause notice proceeded against the partnership concern, but the adjudicating authority proceeded to record findings on the constitution of the concern and to treat the appellant as a sole proprietor without any notice to her on that issue. The order therefore went beyond the scope of the notice and affected the appellant's rights without affording a proper opportunity to meet the case. Such a course was held to be inconsistent with the requirements of natural justice and the authority was directed to reconsider the matter afresh after hearing the appellant.

Conclusion: The impugned orders were set aside and the matter was remanded for fresh adjudication after granting a reasonable opportunity of hearing to the appellant.

Ratio Decidendi: An adjudication cannot sustain findings or liabilities that travel beyond the show cause notice, and any adverse determination made without notice and hearing is vitiated for breach of natural justice.

---