Natural justice in confiscation proceedings requires disclosure, fair hearing, and reasoned treatment of evidence before adverse action

A confiscation order based on undisclosed preliminary enquiry material and a third party's denial of sale was found to breach natural justice because the affected party was not told the substance of that material, was denied a requested chemical test, and was not given a fair opportunity to rebut the evidence. The authority also failed to state whether it accepted or rejected the supporting affidavit filed by the petitioner, or why it was rejected. In a quasi-judicial proceeding, reliance on undisclosed material and rejection of evidence without disclosure and a fair hearing vitiates the order, which was quashed and remitted for fresh decision.

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Issues: Whether the confiscation order was vitiated for breach of natural justice and failure to afford a fair opportunity to meet the material relied upon.

Analysis: The confiscation was based in part on a preliminary enquiry and on a denial of sale by the firm said to have sold the gold, but the petitioner was not informed of the substance of that material or given an opportunity to challenge it. The petitioner also sought a chemical test of the gold to support his case that it was not of foreign origin, yet that opportunity was not granted. The authority further failed to state clearly whether it accepted or rejected the supporting affidavit filed by the petitioner, or why it was rejected. In a quasi-judicial proceeding, such material could not be relied upon without disclosure and fair opportunity to meet it.

Conclusion: The confiscation order was held to be contrary to natural justice and was quashed.

Final Conclusion: The matter was sent back for fresh decision in accordance with law after the impugned findings were set aside.

Ratio Decidendi: A quasi-judicial authority cannot rely on undisclosed material gathered behind a party's back or reject material evidence without disclosure and a fair opportunity to meet it; failure to do so vitiates the order.

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