Judgment:
A.S. Naidu, J.
1. What is assailed in this writ petition, filed under Articles 226 and 227 of the Constitution is the order dated May 16, 1998 (annexure 10) passed by the Commissioner of Commercial Taxes, Orissa, Cuttack, in a proceeding initiated under Section 10-A read with Section 10(b) and Section 10(d) of the Central Sales Tax Act, 1956.
2. The petitioner is a Government of India enterprise engaged in construction of a power plant for the purpose of generation and distribution of electricity at Kania in the district of Angul. It is registered as a dealer under the Orissa Sales Tax Act, 1947 and the Central Sales Tax Act, 1956. In the year 1988, opposite party No. 3, the Sales Tax Officer, had issued declaration forms, commonly known as 'C' forms, in favour of the petitioner for facilitating purchase of goods at a concessional rate for the purpose of utilisation for generation and distribution of electricity in respect of a list attached to the said order vide annexure-1. Admittedly, a few more items of articles were added to the said list in the year 1994. The petitioner-company purchased different items of articles by utilising the 'C' declaration form and paid tax at the concessional rate from the year 1988 onwards. In the year 1997, a notice was issued by opposite party No. 3 vide annexure-2 alleging that the petitioner had purchased goods which are not covered under the certificate of registration on the strength of declaration 'C' forms and had also utilised them for other purposes and that such action contravenes Sections 10(b) and 10(d) of the Central Sales Tax Act, 1956. The details of such purchases were given in the notice and the petitioner-company was called upon to show cause as to why penalty in lieu of prosecution shall not be imposed against it under Section 10-A of the Central Sales Tax Act, 1956.
Another notice was issued on November 11, 1997 calling upon the petitioner to show cause as to why a sum, not exceeding one and half times the tax, which would have been levied under Sub-section (2) of Section 8, shall not be imposed as penalty under Section 10-A of the Central Sales Tax Act. The petitioner-company preferred O.J.C. No, 17456 of 1997 in this Court challenging the said show cause notice to be vague. This Court by order dated December 16, 1997 directed the petitioner to appear before the assessing officer, upon which further particulars shall be furnished for enabling the petitioner to show cause. The petitioner appeared on 23rd December, 1997 and filed preliminary show cause. After a chequered career, the date of hearing was fixed to February 5, 1998 before the Sales Tax Officer (opposite party No. 3). It is averred that, Shri P.V. Ramana Rao, Deputy Manager (Finance) of the petitioner-company, was exclusively conversant with the entire case and records were entrusted to him. Since his younger brother expired in an unfortunate accident at Visakhapatnam, on February 2, 1998 the officer concerned was constrained to proceed to Visakhapatnam. On February 5, 1998 the Senior Manager (Finance) appeared before the Sales Tax Officer and filed a petition for one month's time on the ground that the officer who is in know of the matters is unable to appear due to the unfortunate and sad demise of his younger brother. The Sales Tax Officer (opposite party No. 3) with much difficulty adjourned the case only for four days and posted it to February 10, 1998. On the said date, another petition for adjournment was filed praying for a fortnight time to enable the concerned officer to appear and apprise the matter. The prayer was rejected and an order of penalty under Section 10-A of the Central Sales Tax Act, 1956 was passed imposing penalty of Rs. 5,02,55,561 (rupees five crores two lakhs fifty-five thousand five hundred sixty-one).
The petitioner filed a revision along with a petition for stay before the Commissioner who disposed of the petition for interim stay on March 16, 1998 directing the petitioner to deposit Rs. 1.5 crore by March 25, 1998. The petitioner preferred O.J.C. No. 4013 of 1998 and this Court, while declining to interfere with the interim order directed the Commissioner to dispose of the revision within six weeks. On March 28, 1998, the petitioner deposited the penalty pending disposal of the revision. On May 16, 1998, the revision petition was disposed of by the Commissioner reducing the penalty from Rs. 5,02,55,561 to Rs. 4,65,11,343 vide annexure 10 which is impugned in this case.
3. Mr. S. Mohanty, learned Senior Advocate, appearing for the petitioner strenuously challenged the propriety of the order passed by the Sales Tax Officer (annexure 8) as well as the order passed in revision (annexure 10) on several grounds on merit. It is also emphatically submitted by Mr. Mohanty that the Sales Tax Officer proceeded in a haste and adequate opportunity was not granted to the petitioner to substantiate its case by producing cogent materials due to the absence of the officer who was exclusively conversant with the case and to whom records were entrusted. Thus, there has been gross violation of the principles of natural justice and equity.
4. Learned counsel for the Revenue, on the other hand, submitted that the order passed under Section 10-A of the Central Sales Tax Act is appealable and thus the revision is not maintainable. The petitioner having not preferred any appeal against the order passed by the Sales Tax Officer vide annexure 8, the same has become final and binding. It is further submitted that the petitioner, in respect of similar orders passed under Section 10-A of the Act for the subsequent years, has preferred appeals. In that view of the matter, the present writ application should be dismissed in limine.
5. We have heard learned counsel for the parties at length and perused the order passed by the Sales Tax Officer imposing penalty under Section 10-A of the Central Sales Tax Act (annexure 8) as well as the revisional order passed by the Commissioner (annexure 10) and other relevant documents. In para 13 of the writ application, the petitioner has categorically averred that on February 5, 1998 when the matter was posted for hearing before the Sales Tax Officer, Angul, Shri P.V. Ramana Rao, the Deputy Manager (Finance) who was entrusted with the matter and had dealt with the case, could not appear due to the sad demise of his younger brother. Though a petition for time was filed praying to grant one month's time, the concerned Sales Tax Officer adjourned the case only for four days and concluded the same on February 10, 1998, thereby depriving the petitioner from adequate opportunity to put forth its case as well as placing relevant/supporting records which would have clearly explained the total scenario. The averments made in the writ petition are not disputed nor any counter has been filed repudiating the said facts. Hence, the same are accepted, applying the principles of non-traverse. The learned counsel for the petitioner submits that as the order passed by the Sales Tax Officer suffers from the vice of non-observance of the principle of natural justice, the same should be set aside.
6. The question whether the requirements of natural justice have been met by the procedure adopted in a given case depends to a greater extent on the facts of the said case. The rules of natural justice are not embodied rules, but then, when the duty of deciding a controversy is imposed on the statutory authority it has to decide the same judiciously after giving adequate opportunity to the parties to present their case. In the case of S.L. Kapoor v. Jagmohan AIR 1981 SC 136, while dealing with the distinction between justice being done and being seen to be done, the honourable Supreme Court observed 'it is again absolutely basic to our system that justice must not only be done but must manifestly be seen to be done'.
In the case of Smt Maneka Gandhi v. Union of India AIR 1978 SC 597, the Constitution Bench of the honourable Supreme Court observed 'natural justice is a great humanising principle intended to invest law with fairness and to secure justice and over the years it has grown into a widely pervasive rule affecting large areas of administrative action'. It is further held that the principle of audi alteram partem, which mandates that no one shall be condemned unheard, is a part of the rules of natural justice.
7. Law is well-settled that in the applicability of the doctrine of natural justice there can be no distinction between the quasi judicial function and an administrative function inasmuch as the aim of both is to arrive at a just decision and to prevent miscarriage of justice.
8. Considering the facts in the light of the settled principles of law, we are convinced that there was sufficient cause for non-appearance of the officer of the petitioner-company, who was conversant with the case due to untimely death of his younger brother and that there was no reason not to accommodate the petitioner for a short time, specially when a substantial penalty was being imposed and the case involved complicated questions of facts which according to the petitioner, the officer-in-charge was conversant with. In the given circumstances, the Sales Tax Officer (opposite party No. 3), according to us, did not accord adequate opportunity to the petitioner, thus there was gross violation of the principle of natural justice.
9. After sacrosanctly going through the relevant documents and after hearing the learned counsel for the parties, we are also convinced that all the materials required for an effectual adjudication of the dispute are not available in the records so as to finally determine the lis. Though Mr. Mohanty, learned Senior Advocate, argued in extenso on merits, we restrain ourselves from giving any finding as we are satisfied that adequate opportunity was not accorded to the petitioner by the Sales Tax Officer to present its case and it would be just and proper to remand the matter to the Sales Tax Officer for fresh adjudication. Any observation made by us on merits at this stage would amount to pre-judging the issue and so we refrain from doing so.
10. In view of the discussions made above, we set aside the orders passed by the Sales Tax Officer (annexure 8) and the Commissioner (annexure 10) and direct opposite party No. 3 to hear the matter afresh after giving adequate opportunity to the petitioner-company. We also make it clear that it would be open for the petitioner to furnish such other materials which they feel just and proper for a full-fledged effectual adjudication of the inter se dispute.
The assessment relates to the year 1988. Therefore, we direct the Sales Tax Officer to complete the entire exercise as expeditiously as possible, preferably within a period of six months from the date of communication of this order.
We further direct that the amount of rupees one crore, said to have been deposited by the petitioner, shall continue to remain in deposit till the matter is finally decided.
11. The writ application is accordingly allowed to the extent indicated above. The matter is remitted back to opposite party No. 3 for fresh disposal in accordance with law. Parties to bear their own cost.
P.K. Balasubramanyan, C.J.
12. I agree.