Natural justice is required before quantifying sales tax interest; absence of notice can justify writ jurisdiction despite alternative remedy

Interest quantified for belated payment of deferral dues under the Tamil Nadu General Sales Tax Act was said to attract the principles of natural justice, because fixing liability without prior notice deprived the assessee of any chance to object before quantification. The commentary also states that the existence of an alternative statutory remedy would not bar writ jurisdiction where the impugned action itself is vitiated by breach of natural justice. On that basis, the demand proceedings and the connected appellate order were described as unsustainable.

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Issues: Whether the levy of interest under section 24(3) of the Tamil Nadu General Sales Tax Act, 1959 could be sustained without prior notice or opportunity to object, and whether the availability of an alternative statutory remedy barred the writ petition.

Analysis: The proceeding for recovery of interest was founded on belated payment of deferral dues, but the authority's own stand showed that no prior notice had been issued before quantifying the liability. Even where the statute does not expressly provide for notice, an order fixing interest that entails civil consequences must conform to the principles of natural justice. The absence of notice deprived the assessee of an opportunity to raise objections before the liability was quantified. The existence of an alternative remedy did not bar writ jurisdiction because the impugned action suffered from violation of natural justice.

Conclusion: The demand proceedings and the appellate order were unsustainable for breach of natural justice, and the writ petition was maintainable notwithstanding the alternative remedy.

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