Ex parte adjudication and denied hearing can justify remand to the show-cause notice stage with full liberty to defend.

Ex parte adjudication without a reply to the show-cause notice or a meaningful opportunity of personal hearing may justify interference where the defence has not been considered. On that factual basis, the orders in original and appeal were set aside, and the matter was remitted to the stage of reply to the show-cause notice. The petitioner was permitted to file a reply, appear before the authority on the fixed date, and raise all available contentions, while the authority was directed to reconsider the dispute afresh in light of the earlier observations.

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Issues: (i) Whether the order-in-appeal and the order-in-original warranted interference and remand on the ground that the adjudication proceeded ex parte without proper consideration of the petitioner's defence; (ii) Whether the matter should be restored to the stage of reply to the show-cause notice with liberty to raise all contentions.

Issue (i): Whether the order-in-appeal and the order-in-original warranted interference and remand on the ground that the adjudication proceeded ex parte without proper consideration of the petitioner's defence.

Analysis: The adjudication had proceeded without a reply to the notice and without availing personal hearing, and the appellate authority had affirmed the demand on the basis of the available record. The Court noted that in an identical factual matrix, similar matters had earlier been sent back for reconsideration, with directions to examine whether the services fell outside the taxable net, whether any exemption applied, whether liability arose under the applicable rule and notification, and whether the claim was barred by limitation. In that background, the earlier orders were found fit to be interfered with.

Conclusion: The order-in-appeal and the order-in-original were set aside.

Issue (ii): Whether the matter should be restored to the stage of reply to the show-cause notice with liberty to raise all contentions.

Analysis: Since the dispute required fresh examination at the initial adjudicatory stage, the Court directed supply of the show-cause notice and permitted the petitioner to file a reply and appear before the authority on the fixed date. The Court also directed the authorities to keep in mind the earlier observations and left all contentions open for consideration.

Conclusion: The matter was remitted to the stage of reply to the show-cause notice with liberty to urge all available defences.

Final Conclusion: The petitioner obtained a remand to the original adjudicatory stage, and the departmental authorities were required to reconsider the matter afresh after giving an opportunity of reply and hearing.

Ratio Decidendi: Where adjudication has proceeded ex parte and the defence has not been effectively examined, the orders may be set aside and the matter remitted for fresh consideration at the show-cause notice stage, leaving all contentions open.

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