Natural justice in penalty enhancement: appellate order set aside for denial of hearing and remitted for fresh adjudication.

An appellate enhancement of penalty was held unsustainable where the petitioner had not been heard before the appellate authority. The matter turned on breach of the hearing requirement and the need for reconsideration on merits after affording an opportunity of being heard. The impugned order was quashed and the case was remitted to the appellate authority for fresh disposal in accordance with law after hearing the petitioner.

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Issues: Whether the appellate order enhancing the penalty, passed without hearing the petitioner, could be sustained and whether the matter should be remitted for fresh adjudication.

Analysis: The impugned appellate order resulted in enhancement of the penalty from Rs. 10,000 to Rs. 1,47,086 and the petitioner was not heard by the appellate authority. In these circumstances, the order did not warrant retention, as the dispute required reconsideration after giving the petitioner an opportunity of hearing and deciding the matter on merits in accordance with law.

Conclusion: The impugned order was quashed and the matter was remitted to the appellate authority for fresh disposal after hearing the petitioner.

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