Natural justice in tax adjudication requires effective service of notice, opportunity to reply, and a personal hearing before adverse orders stand.

An adverse tax adjudication cannot be sustained where the affected party asserts non-service of the show cause notice and denial of a personal hearing. The Gauhati HC noted that despatch by registered post, by itself, did not establish effective opportunity to contest the proceedings. The impugned recovery notice and Order-in-Original were set aside, and the matter was remitted for fresh adjudication with supply of the original show cause notice, adequate time to reply, and a personal hearing.

---

---

Issues: Whether the recovery notice and the Order-in-Original were liable to be set aside for want of proper service of the show cause notice and denial of opportunity of hearing, and whether the matter should be remitted for fresh adjudication.

Analysis: The petitioners asserted non-receipt of the show cause notice, non-furnishing of the adjudication materials and absence of any hearing before the Order-in-Original was passed. The respondents relied on despatch of communications by registered post, but the Court found it to ensure that the petitioners receive an effective opportunity to contest the proceedings. In the circumstances, the proceeding was directed to be taken up afresh by supplying the original show cause notice, granting sufficient time to reply, and affording a personal hearing.

Conclusion: The impugned recovery notice and the Order-in-Original were set aside and the matter was remitted for fresh adjudication after compliance with the requirements of notice and hearing, in favour of the petitioners.

Ratio Decidendi: An adverse tax adjudication cannot be sustained where the affected party asserts non-service of the show cause notice and denial of hearing, and the appropriate course is to set aside the order and direct fresh proceedings with effective opportunity to respond.

---