Natural justice bars penalty for delayed ER-1 filing when no show-cause notice or hearing is given.

Penalties for delayed filing of ER-1 returns were held unsustainable where they were imposed without a show-cause notice and without granting a hearing, since both are mandatory before penalty can be levied. The adjudicating order also failed to address the natural justice violation, and the view that no speaking order was required was found untenable. The penalties were therefore set aside.

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Issues: Whether penalties imposed for delayed filing of ER-1 returns were sustainable when no show-cause notice was issued and no opportunity of hearing was granted.

Analysis: The delay in filing the returns was found to have occurred under a mistaken belief regarding the obligation to file ER-1 returns. The penalty had been imposed without issuing a show-cause notice and without affording a hearing, though both are mandatory before imposing penalty. The order also failed to address the violation of natural justice, and the observation that no speaking order was required was held to be untenable.

Conclusion: The penalties for late filing of ER-1 returns were not sustainable in law and were set aside.

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