Natural justice bars statutory penalty without notice or hearing where civil consequences follow and rights are affected.

A statutory penalty carrying civil consequences cannot be imposed without notice and a reasonable opportunity of hearing, even where the governing provision is silent on procedure. The principle of audi alteram partem applies to adverse penal action because such orders affect rights and liabilities. On that basis, a penalty levied for non-payment of admitted tax was unsustainable where the dealer had not been put on notice before the penalty was imposed. The revisional order also fell with the penalty, and the impugned penal levy was set aside for violation of natural justice.

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Issues: Whether penalty under section 13(5) of the Orissa Sales Tax Act, 1947 could be imposed without granting an opportunity of hearing, and whether such penalty could be sustained in the absence of observance of natural justice.

Analysis: Section 13(5) empowered the Commissioner to levy penalty for non-payment of admitted tax within the prescribed limit, but the provision did not expressly exclude the requirement of notice or hearing. The Court held that even where a statute is silent, principles of natural justice are implied where an order entails civil consequences. The core requirement of audi alteram partem demands that no adverse order be passed without notice and a fair opportunity to explain the default. A penal order affecting rights and liabilities cannot stand when the affected dealer was not put on notice before the penalty was imposed.

Conclusion: The penalty order could not be sustained, as imposition of penalty without opportunity of hearing violated principles of natural justice and was indefensible.

Final Conclusion: The writ petition succeeded and the penalty as well as the revisional order were set aside, leaving the assessee free from the impugned penal levy.

Ratio Decidendi: Where a statutory penalty has civil consequences, the authority must afford notice and a reasonable opportunity of hearing even if the statute does not expressly so provide.

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