Mandatory pre-decisional hearing period under sales tax law must be strictly followed; penalty order quashed for premature action.

A penalty order under section 28A(4) of the Karnataka Sales Tax Act was held unsustainable because it was passed before expiry of the mandatory minimum ten-day period for furnishing an explanation. The statutory safeguard requiring a reasonable opportunity of hearing, including the prescribed time limit where the goods had travelled at least one hundred kilometres, was treated as substantive compliance, not a mere procedural formality. Since the authority acted within six days and did not wait for the period fixed by law, the order was quashed for breach of mandatory procedure and the levy could not be sustained without authority of law.

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Issues: Whether the penalty order levied under section 28A(4) of the Karnataka Sales Tax Act, 1957 was invalid for having been passed before expiry of the statutory minimum period of ten days for submitting the explanation.

Analysis: The statutory explanation to section 28A(4) mandated a reasonable opportunity of being heard and prescribed not less than ten days where the destination of goods was at least one hundred kilometres from the interception point. The show cause notice itself granted ten days, but the authority passed the penalty order within six days, without waiting for the period fixed by law. The requirement was not merely procedural in form; it was a mandatory safeguard forming part of the statutory scheme, and action taken in breach of it could not be sustained. The constitutional principle that tax or penalty can be levied only by authority of law reinforced the need for strict compliance with the prescribed procedure.

Conclusion: The penalty order was quashed as having been passed in violation of the mandatory statutory procedure, and the petitioner succeeded on this ground.

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