Natural justice and effective service requirement led to quashing of an ex parte personal penalty order despite alternate remedy.

A writ petition remained maintainable despite the statutory appeal and pre-deposit requirement because a gross breach of natural justice was alleged. The Court held that the alternative remedy rule does not bar writ jurisdiction where effective notice and hearing were absent. It further found that the show cause notice and personal hearing notices were not effectively served on the petitioner, and that affixation at the company premises could not substitute proper service on him personally. The ex parte personal penalty order therefore violated the rule against condemning a person unheard and was quashed to that extent, with the matter remitted for fresh decision in accordance with law.

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Issues: (i) whether the writ petition was maintainable despite the statutory appeal and pre-deposit requirement under the Central Excise Act; (ii) whether the ex parte order imposing personal penalty could be sustained when the show cause notice and personal hearing notices were not effectively served on the petitioner.

Issue (i): Whether the writ petition was maintainable despite the statutory appeal and pre-deposit requirement under the Central Excise Act.

Analysis: The appeal remedy under Section 35B of the Central Excise Act, 1944 was available, and Section 35F of the Central Excise Act, 1944 required pre-deposit before an appeal could be entertained. However, the Court held that the presence of an alternative remedy does not bar writ jurisdiction where there is a gross and clear violation of natural justice. The challenge was not to the merits of the adjudication but to the manner in which the order was passed without effective notice and hearing.

Conclusion: The writ petition was maintainable, and the objection based on alternative remedy was rejected against the petitioner.

Issue (ii): Whether the ex parte order imposing personal penalty could be sustained when the show cause notice and personal hearing notices were not effectively served on the petitioner.

Analysis: The Court found that the petitioner had left service before the show cause notice was issued, and the record did not show effective service of the notice or of the personal hearing notices on him. Service by affixation at the company premises could not, in the facts of the case, substitute proper service on the petitioner personally. Under Section 37C of the Central Excise Act, 1944, service by speed post must be supported by proof of delivery, and in the absence of such effective service the ex parte adjudication violated the requirement that no person be condemned unheard. The Court therefore held that the order suffered from a flagrant breach of natural justice.

Conclusion: The ex parte order imposing personal penalty could not be sustained against the petitioner and was quashed and set aside to that extent.

Final Conclusion: The challenge succeeded on the ground of denial of effective notice and hearing, and the matter was sent back for fresh decision in accordance with law without any prejudice from the Court's observations.

Ratio Decidendi: Where personal penalty is imposed, effective service of the show cause notice and personal hearing notice is mandatory, and in the absence of proof of such service an ex parte order violates natural justice and is liable to be set aside notwithstanding the availability of an appellate remedy.

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