Unauthorised service on a dissolved firm and denial of hearing vitiated excise adjudication, requiring fresh consideration.

Service on a dissolved firm through an ex-employee is not valid where his authority ended with dissolution and there is no fresh authorisation from all partners. The court treated such representation as ineffective against the petitioners. It also held that an adjudicatory order imposing excise duty, interest and penalties cannot stand when passed without giving the affected parties a fair opportunity of hearing. The impugned order was set aside and the matter remitted for fresh adjudication after allowing a reply and hearing, with liberty to proceed ex parte if the petitioners failed to appear.

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Issues: (i) Whether notices and proceedings could validly be treated as served on the dissolved firm through an ex-employee who had no continuing authority after dissolution of the partnership. (ii) Whether the order imposing excise duty, interest and penalties could stand when the petitioners were not afforded an opportunity of hearing before final adjudication.

Issue (i): Whether notices and proceedings could validly be treated as served on the dissolved firm through an ex-employee who had no continuing authority after dissolution of the partnership.

Analysis: The authority of the ex-employee to represent the firm had come to an end upon dissolution of the partnership. There was nothing to show that all the partners had authorised him to appear on their behalf after dissolution, and service through him could not bind the petitioners in the absence of fresh authorisation.

Conclusion: The service and representation through the ex-employee were not valid against the petitioners.

Issue (ii): Whether the order imposing excise duty, interest and penalties could stand when the petitioners were not afforded an opportunity of hearing before final adjudication.

Analysis: Since the petitioners were not heard before the order was passed, the adjudication suffered from breach of the requirement of fair hearing. The matter required reconsideration after permitting the petitioners to file a reply and after granting them an opportunity of hearing, with liberty to proceed ex parte if they failed to appear.

Conclusion: The impugned order was set aside and the matter was remitted for fresh decision after giving the petitioners an opportunity of hearing.

Final Conclusion: The petitioners obtained relief because the adjudication was vitiated by invalid representation and denial of hearing, and the matter was reopened for fresh consideration by the Commissioner.

Ratio Decidendi: An adjudicatory order affecting civil liability cannot be sustained where representation through an unauthorised person after dissolution of the firm is treated as sufficient service and the affected parties are not given a proper opportunity of hearing.

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