Natural justice in penalty proceedings requires a meaningful hearing after disclosure of relied-on documents; revisional review cannot cure denial.

A penalty order under the Kerala General Sales Tax Act was vulnerable where the assessee was not given an effective hearing after the documents relied on by the authority were supplied. The Court treated the penalty provision as penal in nature and held that natural justice required a meaningful opportunity to respond to the material before the order was made. A prior hearing and a written reply did not cure the later of a further oral hearing. The revisional orders could not remedy that defect, so the penalty and revisional orders were set aside and the matter was remitted for fresh consideration after due hearing.

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Issues: Whether a penalty order passed under section 45-A of the Kerala General Sales Tax Act, 1963 was liable to be set aside for failure to afford an effective opportunity of hearing after supply of the documents relied on by the authority, and whether the defect could be cured by the revisional orders.

Analysis: The penalty provision was treated as penal in nature and, therefore, subject to the requirements of natural justice. A hearing had been given initially, but the assessee was later supplied photocopies of the slips and was permitted to file a detailed reply on that basis. After that reply, no further personal hearing was granted before the penalty order was made. The refusal to hear the assessee after the material documents were supplied was held to amount to a violation going to the root of the matter. A subsequent revisional consideration could not cure the denial of an effective opportunity to be heard before the original penalty order.

Conclusion: The penalty order and the revisional orders were set aside, and the matter was remitted to the original authority for fresh consideration after granting a hearing; the decision is in favour of the assessee.

Final Conclusion: The assessment of penalty could not stand because the mandatory requirement of a meaningful hearing was not satisfied, and the proceedings were sent back for fresh disposal after due hearing.

Ratio Decidendi: Where a penal order is passed under a provision requiring hearing, supply of documents followed by a written reply does not dispense with a further effective oral hearing, and denial of such hearing vitiates the order.

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