Natural justice and proper notice control tax adjudication where vague allegations and undisclosed material vitiate the order.

A vague show cause notice that merely repeated statutory language, without material particulars supporting allegations of fraud, wilful misstatement or suppression, was held to deny a meaningful opportunity to respond. The adjudication also relied on a letter not referred to in the notice or supplied before decision, and the appellate order failed to address these objections. For breach of natural justice and want of proper notice and disclosure, the impugned cancellation and appellate orders were quashed, with liberty to issue a fresh notice, grant personal hearing, and pass a reasoned order within the stipulated timelines.

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Issues: Whether the cancellation order and appellate order were vitiated for want of proper notice, non-supply of material, and breach of natural justice, warranting interference in writ jurisdiction.

Analysis: The show cause notice was found to be vague and to contain only statutory language without material particulars supporting the allegations of fraud, wilful misstatement, or suppression of facts. The order-in-original additionally relied on a letter that had not been referred to in the notice or supplied to the petitioner before the decision was made, depriving the petitioner of a meaningful opportunity to answer the case. The appellate order also failed to deal with these material contentions. In the circumstances, the impugned orders could not be sustained. The Court also accepted the petitioner's undertaking not to utilise accumulated ITC for three months and directed adherence to the stated timelines for any fresh notice and adjudication.

Conclusion: The impugned orders were quashed and set aside, with liberty reserved to issue a fresh show cause notice, afford a personal hearing, and pass a reasoned order within the stipulated time.

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