Natural justice bars penalty orders passed without prior show cause notice and personal hearing; Revenue appeal dismissed.

A penalty order cannot be sustained where it is issued without prior service of a show cause notice and without affording a personal hearing, because such adjudication violates the principles of natural justice. The record indicated that the respondent was proceeded against only through a corrigendum issued with the adjudication order, and no earlier notice had been served before penalty was imposed. As the factual position was not controverted, the order was rightly set aside on procedural fairness grounds, and the Revenue's appeal was dismissed.

---

---

Issues: Whether the penalty order was vitiated for want of a proper show cause notice and denial of personal hearing, and whether the appeal by the Revenue was liable to be dismissed.

Analysis: The respondent was proceeded against only through a corrigendum issued along with the adjudication order, and the record showed that no prior show cause notice had been served before the penalty was imposed. The Commissioner (Appeals) found that the adjudicating authority had not afforded an opportunity of personal hearing before passing the order and that the proceedings were contrary to the principles of natural justice. In the appeal, the Revenue did not controvert the factual position that no show cause notice had been issued before the adjudication order.

Conclusion: The penalty order was rightly set aside for breach of natural justice, and the Revenue's appeal was dismissed.

Ratio Decidendi: An adjudication imposing penalty cannot be sustained when it is passed without prior show cause notice and opportunity of personal hearing, as such action violates the principles of natural justice.

---