Natural justice in customs adjudication requires cross-examination before relying on witness statements; orders based on undisclosed material cannot stand.

Customs adjudication for confiscation and penalty must comply with natural justice because the authority acts in a quasi-judicial capacity. Where the decision is based substantially on witness statements recorded behind the noticee's back, the affected person must be given an opportunity to cross-examine those witnesses. Denial of that opportunity renders the inquiry unfair, and an order founded on such material is liable to be quashed in writ proceedings.

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Issues: Whether the customs adjudication was vitiated for breach of natural justice because the authority relied on statements recorded behind the petitioner's back without giving an opportunity to cross-examine the witnesses.

Analysis: In proceedings for confiscation and penalty under the Sea Customs Act, the customs authority acts in a quasi-judicial capacity and must observe the fundamental requirements of natural justice. The authority cannot base its conclusion on statements recorded in the absence of the affected person without affording an opportunity to test those statements by cross-examination. Where the order of confiscation and penalty rests substantially on such material, the inquiry is unfair and the resulting decision cannot stand under the writ jurisdiction of the Court.

Conclusion: The impugned customs order was held to be vitiated by breach of natural justice and was liable to be quashed.

Ratio Decidendi: In customs adjudication involving confiscation and penalty, reliance on witness statements recorded behind the noticee's back without an opportunity of cross-examination violates natural justice and invalidates the order.

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