Natural justice in tax penalty proceedings: seizure and penalty set aside where material was not properly supplied or considered.

A writ petition challenging penalty and seizure under the Assam General Sales Tax Act was held maintainable despite an alternative appellate remedy, because the challenge raised legality and procedural fairness concerns warranting judicial scrutiny. On the merits, the revenue authorities were required to prove the alleged transport contravention and to afford a reasonable opportunity by supplying the material relied upon. The revisional authority failed to deal with the dealer's explanation, did not properly address non-supply of the verification report, and relied on an inadequate record; the penalty and revisional orders were therefore unsustainable, set aside, and the matter was remitted for fresh adjudication.

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Issues: (i) Whether the writ petition could be entertained despite the availability of an alternative appellate remedy under the sales tax statute. (ii) Whether the penalty and seizure action for alleged contravention of the transport restrictions under section 46 of the Assam General Sales Tax Act, 1993, could stand in the absence of proper consideration of the material on record and compliance with natural justice.

Issue (i): Whether the writ petition could be entertained despite the availability of an alternative appellate remedy under the sales tax statute.

Analysis: The existence of an appellate remedy did not, on the facts presented, compel rejection of the writ petition at the threshold. The challenge raised issues touching the legality of the penal action and the manner in which the revisional authority proceeded, and the record disclosed serious procedural and factual concerns warranting judicial scrutiny.

Conclusion: The writ petition was held maintainable and not rejected merely for non-exhaustion of the alternative remedy.

Issue (ii): Whether the penalty and seizure action for alleged contravention of the transport restrictions under section 46 of the Assam General Sales Tax Act, 1993, could stand in the absence of proper consideration of the material on record and compliance with natural justice.

Analysis: The statutory scheme required correct disclosure and strict compliance with the prescribed transport formalities, but the revenue authorities bore the burden of proving the alleged contravention. The undertaking given by the dealer was not treated as an admission of guilt, and the dealer was entitled to a reasonable opportunity before reliance was placed on verification reports. The revisional authority failed to address the material explanation offered, ignored the plea regarding non-supply of the verification report, and relied on records that were either unavailable or not supported by the materials before the Court. On that basis, the penal order and the revisional determination were found unsustainable.

Conclusion: The penalty order and the revisional order were unsustainable and were set aside, with the matter sent back for fresh adjudication after hearing the parties.

Final Conclusion: The controversy was not finally determined on merits; the impugned orders were quashed and the matter was remitted for fresh decision, with interim protection against recovery in the meantime.

Ratio Decidendi: Where penalty is imposed for alleged statutory transport violation, the authority must prove the contravention and must afford a reasonable opportunity by supplying the material relied upon; an unexplained assumption that an undertaking amounts to admission cannot sustain the penalty.

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