Natural justice controls statutory penalty proceedings: specific notice and hearing are required before penalty can be imposed.

Statutory penalty under section 78(5) of the Rajasthan Sales Tax Act could not be upheld where declaration forms were blank or incompletely filled unless the assessee first received a specific show-cause notice and a opportunity of hearing. The court applied the principle that, even if non-compliance in transport declaration forms may attract penalty, the proceedings must still satisfy natural justice. The impugned penalty orders were therefore set aside and the matter remitted for de novo consideration by the assessing authority in accordance with law.

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Issues: Whether penalty proceedings under section 78(5) of the Rajasthan Sales Tax Act, 1994 could be sustained when the declaration form was blank or incompletely filled and whether the matter should be remanded for fresh adjudication after giving the assessee a proper opportunity of hearing.

Analysis: The dispute turned on the effect of the Supreme Court decisions holding that non-compliance in transport declaration forms may attract penalty, but the proceedings must still conform to natural justice. The Court noted that section 78(5) contemplates an opportunity of hearing and that a specific notice describing the defects and deficiencies was necessary before penalty could be decided. It also considered that the assessee had succeeded before the appellate authorities, yet the earlier orders could not stand once the matter had to be reconsidered in the light of the Supreme Court rulings and the requirement of a proper hearing.

Conclusion: The penalty orders could not be finally sustained in their existing form and the matter had to be decided afresh after issuing a proper show-cause notice and affording the assessee an opportunity of hearing.

Final Conclusion: The revisions were disposed of by setting aside the impugned orders and remitting the penalty proceedings to the assessing authority for de novo consideration in accordance with law and natural justice.

Ratio Decidendi: Even where statutory penalty is otherwise attracted, the authority must give a specific show-cause notice and a real opportunity of hearing before imposing penalty, and failure to do so warrants remand for fresh adjudication.

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