Natural justice in adjudication requires effective reply and hearing, leading to quashing and remand for fresh decision.

An adjudication order may be set aside where the assessee was not given an effective opportunity to reply and be heard, as compliance with natural justice requires disclosure of relied upon documents and a meaningful personal hearing. The Madras HC quashed the impugned order and remitted the matter for fresh adjudication, directing the department to furnish the documents again, allow replies, proceed year-wise with adequate interval, and issue prior notice of hearing. The fresh order was to be reasoned and deal with all submissions, while all rights, contentions, including limitation, were kept open and no finding on the merits was recorded.

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Issues: Whether the impugned adjudication order was liable to be quashed and the matter required fresh adjudication after permitting the assessee to file replies and be heard.

Analysis: The appeals were disposed of on the basis that the assessee would submit replies to the show cause notices, the department would furnish the relied upon documents and enclosures afresh, and the adjudicating authority would proceed year-wise with adequate interval and after giving prior notice of personal hearing. The order to be passed was directed to be a reasoned order dealing with all submissions, while all rights and contentions, including limitation, were kept open.

Conclusion: The impugned order was quashed and set aside, and the matter was remitted for fresh adjudication in accordance with the directions issued.

Final Conclusion: The proceedings were restored for reconsideration after compliance with the requirements of reply, disclosure of documents, and personal hearing, with no findings on the merits.

Ratio Decidendi: Where adjudication is proceeded with without affording an effective opportunity to reply and be heard, the order may be set aside and the matter remitted for fresh decision after compliance with natural justice.

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