Natural justice breach in tax adjudication requires quashing the order and fresh hearing on merits.

An adjudication order passed without granting the affected party a hearing breaches audi alteram partem and cannot stand. The Bombay HC noted that the impugned tax order had been made without giving the petitioner an opportunity to be heard, which offended natural justice. On that basis, and in light of the parties' common stand, the proper course was to quash the order and remit the matter for fresh adjudication on merits after hearing both sides. The principle stated is that an order made in breach of natural justice must be set aside and decided afresh in accordance with law.

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Issues: Whether the impugned tax adjudication order, passed without hearing the petitioner, was liable to be set aside and the matter remanded for fresh adjudication.

Analysis: The order was found to have been passed without granting the petitioner an opportunity of hearing, which offended the principles of natural justice. In view of the common stand of the parties, the proper course was to quash the order and direct a fresh adjudication on merits after affording both sides a hearing.

Conclusion: The impugned order was set aside and the proceedings were remanded for de novo hearing and a reasoned decision in accordance with law.

Ratio Decidendi: An adjudication order passed in breach of audi alteram partem cannot stand and must be set aside, with the matter remitted for fresh decision after hearing the affected party.

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