Natural justice breach in tax adjudication led to setting aside the order and remand for fresh hearing.

Failure to consider the assessee's show cause reply before passing the order-in-original amounted to a breach of natural justice. The reply had been filed on the departmental portal, but it was not placed before the adjudicating authority, so the defence was not examined before adjudication. The Bombay HC therefore held that the impugned order could not be sustained and restored the matter for fresh adjudication after giving the assessee a proper hearing and considering the reply.

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Issues: Whether the order-in-original was vitiated for failure to consider the petitioner's show cause reply, resulting in violation of the principles of natural justice, and whether the matter should be remanded for fresh adjudication.

Analysis: The show cause reply had been filed through the departmental portal, but it was not brought to the notice of the adjudicating authority. Since the reply was not considered before passing the impugned order, the adjudication stood affected by a communication lapse and the petitioner was denied proper consideration of its defence. In these circumstances, the impugned order could not be sustained and the appropriate course was to restore the matter to the adjudicating authority with a fresh opportunity of hearing.

Conclusion: The order-in-original was set aside as violative of natural justice and the matter was remanded for fresh decision after considering the reply and granting the petitioner a fresh hearing.

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