According to the Ministry of Defence, Natarajan was suspended to ensure fair investigation.
Natarajan was interrogated by the CBI in the case in Apr after former Army chief General VK Singh alleged irregularities in the purchases of Tatra Trucks.
The CBI is looking into the matter if any guidelines were violated by the defence public sector unit in the purchase and supply of trucks to the Indian Army.
Last week, the Defence Ministry also questioned the BEML chief to explain his stand when he publicly filed a defamation case against Gen VK Singh. The government also said that Natarajan was not authorised to make the remark.
Gen VK Singh stirred controversy after he alleged that he was offered a bribe of Rs 14 crore to clear a tranche Tatra trucks for the Indian Army.