IRON EXCHANGE INDIA LTD Vs. STATE OF ORISSA

JUDGEMENT

(1.) These writ applications Involve identical dispute, and therefore, are disposed of by this common judgment which 6hali govern each one of them. Petitioner has moved the Court for stay of realisation of demands raised under the Orissa Sales -tax Act, 1947 (in short, the 'Act') for the quarters ending 31 -12 -1984 and 31 -3 -1985 and assessment years 1986 -86 and 1986 -87. The Sales Tax Officer, Ward -A, Koraput -1 Circle, Jeypore being of the view that the petitioner was executing works contract, levied tax and total demand raised for the aforesaid various end years including those raised under the Orissa Additional Sales tax Rules, 1975 (in short, the 'Rules') come to Rs. 37.27,525/ -, Since petitioner's challenge to the assessment did not yield any fruitful result before the appellate authorities, applications were field under Section 24(1) of the Act. Undisputedly references have been made to this Court and they are pending. During pandency of reference applications, petitioner moved the Orissa Sales Tax Tribunal (in short, the 'Tribunal') for stay. As these applications were not disposed of, petitioner has moved this Court for interference in the present writ applications.

(2.) A dispute was raised by the Revenue about maintainability of application for stay before the Tribunal. Making an elaborate analysis of the provisions contained in Section 24(7) of the Act, a Full Bench of this Court has held that the Tribunal has no jurisdiction to stay recovery of the amounts due under the orders of the Tribunal pending application for reference before the Tribunal or High Court under Section 24 of the Act. Full Bench, however, did not consider it necessary to decide the question whether writ applications would lie because that question was not before the Full Bench. In Commissioner of Income tax, Delhi v. Benei Dhar and Sons, AIR 1986 SC 421 it was held that High Court in appropriate cases can deal with the applications for stay in exercise of powers conferred under Art. 226 of the Constitution of India, 1950 during pendency of reference or application therefor in terms of Section 24 of the Act. That is how we have taken up these writ applications for consideration.

(3.) WE shall deal with first relating to validity of Section 13(5) of the Act. It is pleaded that it does not provide for grant of opportunity though levy of penalty involves civil consequences and therefore is unconstitutional. Though there is no specific provision in Section 13(5) of the Act for grant of an opportunity before levy of penalty, principles of natural justice obligate that before imposition of penalty an opportunity has to be granted. Where a statutory provision does not exclude natural justice, the requirement of affording an opportunity can be assumed, when the proceedings are quasi -judicial. Even if a statute is silent and there are no positive words in the Act or Rules made there under spelling out the need to hear the party whose rights and interest are likely to be affected, the requirement to follow the fair procedure before taking a decision must be read to the statute unless the statute provides otherwise. The principles of natural justice must be read into unoccupied interstices of the statute unless there is a clear mandate to the contrary. No form or procedure should ever be permitted to exclude the presentation of a litigant's defence. Even in the absence of a provision in procedural laws, power inheres in every Tribunal, of a judicial or quasi -judicial character, to adopt modalities necessary to achieve requirements of natural justice and fair play. Procedure is grounded on principles of. natural justice. It has been a cherished principle. 'The right of a man to be heard in his defence is the most elementary protection'. (See Pullogh v. Abardon, 1971 (2) All ER 1273). Where the statute is silent about the observance of the principles of natural justice, such statutory silence is taken to imply compliance with the principles of natural justice. The application of natural justice becomes presumptive, it may be excluded by express words of statute or necessary intendment. (See Swedesi Cotton Mills etc v. Union of India etc. etc., AIR 1961 SC 818) Is aim is to secure justice or to prevent miscarriage of justice. Principles of natural justice do not supplant the law, but supplement it. These rules operate only in areas not covered by any law validly made. They are means to an end and not an end in themselves. Audi alteram pattern rule is a highly effective one designed to act as a healthy check on the abuse or misuse of power. Hence its reach should not be narrowed and its applicability circumscribed. lt has many facets. Two of them are notice of the case to be met and opportunity to explain. This rule is universally respected and duty to afford a fair hearing in Lord Danning's off -quoted language is 'a duty lying upon everyone who decides something' in the exercise of legal power. Wherever civil consequences are involved, invariably principles of natural justice are to be followed. Civil consequence undoubtedly covers infraction of not merely property or personal rights but of civil liberties, material deprivation and non -pecuniary damages. Fairness is a flexible pragmatic and relative concept, not a rigid, ritualistic or sophisticated abstraction, In the aforesaid premises, the irresistible conclusion is that opportunity has to be granted before imposition of penalty under Section 13(5) of the Act. Mere absence of a specific requirement to grant opportunity does not render the provision unconstitutional, since the deficiency is made good by principles of natural justice.