Natural justice in adjudication: failure to consider a filed reply and to give proper hearing opportunities vitiated the order.

An adjudication order was held vitiated for breach of natural justice where the authority recorded that no reply had been filed despite the noticee's reply having been received before the order, showing non-application of mind. The process was also defective because personal hearings were fixed on three consecutive dates without the sufficient interval required by Clause 14.3 of Circular No. 1053/2/2017-CX, which mandates three effective opportunities through separate communications. The order was set aside and the matter remitted for fresh consideration on merits after granting the required hearings and considering the reply.

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Issues: Whether the order-in-original was liable to be quashed for violation of principles of natural justice on account of non-consideration of the petitioner's reply and failure to grant personal hearings at sufficient intervals as required by the departmental circular.

Analysis: The impugned order recorded that no reply had been filed, although the petitioner had sent a reply to the show cause notice and it was received well before the adjudication order. The reply was not considered, showing non-application of mind. The record also showed that personal hearings were fixed on three consecutive dates without sufficient interval. Clause 14.3 of Circular No. 1053/2/2017-CX requires at least three opportunities of personal hearing with sufficient interval of time and separate communications for each opportunity. That requirement was treated as mandatory, and the adjudication process did not satisfy it.

Conclusion: The order-in-original was vitiated for breach of natural justice and was set aside.

Final Conclusion: The matter was remitted to the adjudicating authority for fresh consideration on merits after affording three effective personal hearings and considering the petitioner's reply.

Ratio Decidendi: Where a mandatory adjudicatory procedure requires multiple personal hearings at sufficient intervals and the noticee's reply has in fact been filed, failure to consider the reply and to follow the hearing protocol vitiates the order for breach of natural justice.

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