Natural justice and writ maintainability: enhanced security demand set aside for want of prior hearing.

The High Court may entertain a writ petition despite an available revisional remedy where the impugned enhancement of security is alleged to have been made in breach of natural justice. Here, the dealer was not given a prior opportunity of hearing before additional security was demanded, so the alternative-remedy rule did not bar writ jurisdiction. The statutory power to require security had to be exercised fairly, and natural justice was read into the scheme because it was not excluded by clear language. The enhanced security demand and consequential notice were set aside, and the matter was remitted for fresh consideration after disclosure of the material relied upon.

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Issues: (i) whether the writ petition was maintainable despite the availability of a revisional remedy under the sales tax law when the impugned demand of enhanced security was made without prior hearing; (ii) whether the demand of additional security and the consequential notice could stand when no opportunity of being heard was granted before enhancement of the security.

Issue (i): whether the writ petition was maintainable despite the availability of a revisional remedy under the sales tax law when the impugned demand of enhanced security was made without prior hearing

Analysis: The rule requiring exhaustion of alternative remedies is one of policy and discretion, not an absolute bar. Where the impugned action is alleged to have been taken in breach of natural justice, the High Court may entertain the writ petition notwithstanding the existence of a statutory revisional remedy. Since the petitioner was not afforded an opportunity before the enhanced security was demanded, the exception to the alternative-remedy rule applied.

Conclusion: The writ petition was maintainable and was rightly entertained.

Issue (ii): whether the demand of additional security and the consequential notice could stand when no opportunity of being heard was granted before enhancement of the security

Analysis: The statutory scheme empowered the authority to require security, but it did not exclude the requirement of fairness. Principles of natural justice are read into the statute unless excluded by clear language. Enhancement of security affecting the dealer's rights could not be made behind its back. The absence of a prior opportunity to explain the position rendered the impugned order and consequential demand procedurally defective.

Conclusion: The enhanced security demand and consequential notice were set aside for breach of natural justice.

Final Conclusion: The dealer succeeded in challenging the enhanced security demand, and the matter was sent back for fresh consideration after disclosure of the materials proposed to be used against it.

Ratio Decidendi: Even where a statute provides a revisional remedy, the High Court may entertain a writ petition against an order enhancing security if the order is made without affording the affected party a prior opportunity of hearing, because natural justice is implied unless expressly excluded.

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