TMI Blog2024 (1) TMI 570X X X X Extracts X X X X X X X X Extracts X X X X ..... onstitutional judgment in MANEKA GANDHI VERSUS UNION OF INDIA [ 1978 (1) TMI 161 - SUPREME COURT] , while dealing with a challenge laid to an order by which a passport was impounded, expounded upon the significance of the principles of audi alteram partem to the doctrine of natural justice. The Supreme Court in M/S. DHARAMPAL SATYAPAL LTD. VERSUS DEPUTY COMMISSIONER OF CENTRAL EXCISE, GAUHATI OTHERS [ 2015 (5) TMI 500 - SUPREME COURT] outlined the fundamental importance of providing an opportunity for hearing before making any decision, and characterized it as a basic requirement in any legal proceedings. The Supreme Court further propounded that compliance with principles of natural justice is an implied mandatory requirement, and non-observance of these principles can invalidate the exercise of power. In the present case, when the petitioner had cancelled its registration in the year 2019, a proper notice was required to be issued to it under Section 74 of the Act at its address. However, the authorities simply uploaded the Section 74 show cause notice on the web portal inspite of knowing that the petitioner had already cancelled its registration prior to the date of issuance of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of hearing to the petitioner. He submits that the date fixed for hearing was August 22, 2023, on which date the petitioner could not appear. Subsequently, the appellate authority passed an order on October 5, 2023 dismissing the appeal of the petitioner on the ground that none appeared on behalf of the petitioner and reaffirming the order passed by Assistant Commissioner, State Tax/respondent No.3. 3. It is trite law that principles of audi alteram partem are required to be followed by the authority and giving a go by to the same results in violation of the principles of natural justice. One may examine the development of the law in relation to natural justice. The Division Bench of this Court in S.R. Cold Storage v. Union of India and Others reported in 2022 SCC online (All) 550; {[2022] 448 ITR 37 (All)} held as follows: 25. The first and foremost principle of natural justice is commonly known as audi alteram partem rule. It says that no one should be condemned unheard. Notice is the first limb of this principle. It must be precise and unambiguous. It should appraise the party determinatively the case he has to meet. Time given for the purpose should be adequate so as to enable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conscience, to be ranked as fundamental. The purpose of following the principles of natural justice is the prevention of miscarriage of justice. 4. The Supreme Court, in the celebrated constitutional judgment in Mrs. Maneka Gandhi v. Union of India and another reported in (1978) 1 SCC 248 , while dealing with a challenge laid to an order by which a passport was impounded, expounded upon the significance of the principles of audi alteram partem to the doctrine of natural justice. Justice P.N. Bhagwati while authoring the judgment beautifully expounded the said principles as follows: 14. ..But at the same time it must be remembered that this is a rule of vital importance in the field of administrative law and it must not be jettisoned save in very exceptional circumstances where compulsive necessity so demands. It is a wholesome rule designed to secure the rule of law and the court should not be too ready to eschew it in its application to a given case. True it is that in questions of this kind a fanatical or doctrinaire approach should be avoided, but that does not mean that merely because the traditional methodology of a formalised hearing may have the effect of stultifying the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rinciples of natural justice. It is, however, necessary to remember that the rules of natural justice are not a constant: they are not absolute and rigid rules having universal application. It was pointed out by this Court in Suresh Koshy George v. University of Kerala [AIR 1969 SC 198 : (1969) 1 SCR 317 : (1969) 1 SCJ 543] that the rules of natural justice are not embodied rules and in the same case this Court approved the following observations from the judgment of Tucker, L.J. in Russel v. Duke of Norfolk [(1949) 1 All ER 109] : There are, in my view, no words which are of universal application to every kind of inquiry and every kind of domestic tribunal. The requirements of natural justice must depend on the circumstances of the case, the nature of the inquiry, the rules under which the tribunal is acting, the subject-matter that is being dealt with, and so forth. Accordingly I do not derive much assistance from the definitions of natural justice which have been from time to time used, but, whatever standard is adopted, one essential is that the person concerned should have a reasonable opportunity of presenting his case. 3. One of the rules which constitutes a part of the prin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee the information supplied to it by the departmental representatives. This case was relied upon by this Court in a later decision in Raghubar Mandal Harihar Mandal's case (supra) where it reiterated the decision of this Court in Dhakeswari Cotton Mills Ltd.'s case (supra), and while further endorsing the decision of the Lahore High Court in Seth Gurmukh Singh's case pointed out the rules laid down by the Lahore High Court for proceeding under subsection (3) of Section 23 of the Income-tax Act and observed as follows: The rules laid down in that decision were these: (1) While proceeding under sub-section (3) of section 23 of the Income-tax Act, the Income-tax Officer is not bound to rely on such evidence produced by the assessee as he considers to be false; (2) if he proposes to make an estimate in disregard of the evidence, oral or documentary, led by the assessee, he should in fairness disclose to the assessee the material on which he is going to found that estimate; (3) he is not however debarred from relying on private sources of information, which sources he may not disclose to the assessee at all; and (4) in case he proposes to use against the assessee t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that principles of natural justice operate as implied mandatory requirements, non-observance of which invalidates the exercise of power. *** 35. From the aforesaid discussion, it becomes clear that the opportunity to provide hearing before making any decision was considered to be a basic requirement in the court proceeding. Later on, this principle was applied to other quasi-judicial authorities and other tribunals and ultimately it is now clearly laid down that even in the administrative actions, where the decision of the authority may result in civil consequences, a hearing before taking a decision is necessary. It was, thus, observed in A.K. Kraipak v. Union of India; [(1969) 2 SCC 262] that if the purpose of rules of natural justice is to prevent miscarriage of justice, one fails to see how these rules should not be made available to administrative inquiries. In Maneka Gandhi v. Union of India; [(1978) 1 SCC 248] also the application of principle of natural justice was extended to the administrative action of the State and its authorities. It is, thus, clear that before taking an action, service of notice and giving of hearing to the noticee is required. In Maharashtra State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was followed infringed upon the right to a fair and reasonable procedure, independent of the outcome. In compliance with this line of thought, the courts have read the principles of natural justice into an enactment to save it from being declared unconstitutional on procedural grounds [See Olga Tellis v. Bombay Municipal Corporation: (1985) 3 SCC 545; C.B. Gautam v. Union of India:(1993) 1 SCC 78; Sahara India (Firm), Lucknow v. Commissioner of Income Tax, Central-I: (2008) 14 SCC 151 and Kesar Enterprises v. State of Uttar Pradesh: (2011) 13 SCC 733]. Secondly, natural justice principles breathe reasonableness into the procedure. Responding to the argument that the principles of natural justice are not static but are capable of being moulded to the circumstances, it was held that the core of natural justice guarantees a reasonable procedure which is a constitutional requirement entrenched in Articles 14, 19 and 21. The facet of audi alterum partem encompasses the components of notice, contents of the notice, reports of inquiry, and materials that are available for perusal. While situational modifications are permissible, the rules of natural justice cannot be modified to suit th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y decision-making, upholding the principle of due process while also providing a crucial foundation for just and equitable legal or administrative proceedings. 11. Furthermore, the significance of the principal of audi alteram partem is deeply entrenched in the foundational tenets of natural justice. The phrase, denoting hear the other side, is emblematic of the sacrosanct right vested in individuals to be accorded a fair and impartial hearing before the adjudication of their rights or interests. This cardinal principle operates as a bulwark against arbitrariness and the capricious exercise of authority, mandating that decisions be reached only subsequent to a comprehensive and equitable deliberation of all relevant contentions. It is, in essence, the sine qua non of due process, standing as an unwavering sentinel against the potential tyranny of unchecked power. The judicious application of audi alteram partem not only upholds the sanctity of individual freedom but also fortifies the integrity of legal proceedings, fostering a milieu where justice is not merely meted out, but is perceived to be done through a conscientious consideration of diverse and adversarial perspectives. 12. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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