Natural justice in adjudication fails when defence material is ignored and cross-examination is denied without reasons.

Adjudication founded on a seized diary and witness statements was said to be unsustainable where the authority did not consider the defence chart prepared from the same diary, gave no adequate reasons for refusing cross-examination of the material witness and detecting officers, and failed to explain the alleged corroboration of the witness statement. The note records that, because the defence material was not dealt with in a reasoned manner, the adjudication did not meet the requirements of natural justice and was required to be set aside for fresh adjudication after granting cross-examination and an opportunity to place defence material.

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Issues: Whether the adjudication could be sustained when the defence chart prepared from the seized diary was not considered and cross-examination of relied-upon witnesses was denied, thereby violating the principles of natural justice.

Analysis: The demands and penalties were founded heavily on the seized diary and on statements of witnesses, but the adjudicating order did not deal with the defence chart prepared from the same diary. The refusal to permit cross-examination of the material witness and the detecting officers was not supported by adequate reasons, and the order also failed to explain the alleged corroboration of the witness statement. Since the noticee's defence material was not considered in a reasoned manner, the adjudication did not satisfy the requirements of natural justice.

Conclusion: The adjudication could not be sustained and was required to be set aside with a direction for fresh adjudication after granting cross-examination and an opportunity to place defence material.

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