Natural justice in customs adjudication bars reliance on undisclosed adverse material and keeps the burden on the department.

In quasi-judicial customs adjudication, adverse material gathered through secret enquiries cannot be relied on unless the affected party is given a fair opportunity to test it, including cross-examination where appropriate. Because the department used statements and enquiries made behind the petitioner's back, the confiscation adjudication was vitiated for breach of natural justice. The Court also held that the petitioner's inability to prove each individual purchase did not itself establish illegal import, since the burden remained on the department to prove import without the necessary permit. The confiscation orders were quashed and the petitions were allowed.

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Issues: Whether the confiscation orders could stand when the department relied on secret enquiries and material not disclosed to, or tested by, the petitioner, and whether the burden remained on the department to prove that the goods were imported without the necessary permit.

Analysis: The proceedings were quasi-judicial in nature, and the essential requirement of natural justice was that no material adverse to the petitioner could be used unless he was given an opportunity to test it. Since the department relied on statements and enquiries made behind the petitioner's back, without producing the persons concerned for cross-examination or otherwise affording an opportunity to challenge the material, the adjudication was vitiated. The Court also held that failure by the petitioner to prove each individual purchase did not by itself establish illegal import, because the burden of proving import without proper authority remained on the department.

Conclusion: The confiscation orders were unsustainable and were quashed; the petitions were allowed.

Ratio Decidendi: In quasi-judicial customs adjudication, adverse material gathered behind a party's back cannot be relied upon unless the party is given a fair opportunity to test it, and the burden of proving illicit import remains on the department.

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