Mineral Zone vs. The State Government Of Andhra Pradesh

Held

The Court held that the explanations submitted by the petitioners were not considered by the respondents while passing the impugned demand notices, and an opportunity for a personal hearing was also not provided. Consequently, the Court found the impugned demand notices issued by the 3rd respondent to be liable to be set aside. The Court's reasoning is based on the violation of the principles of natural justice, specifically the right to be heard and the requirement for authorities to consider all submissions made by the affected party before passing an order. The ratio decidendi is that administrative actions affecting rights and imposing penalties must adhere to procedural fairness, including proper consideration of defenses and affording a personal hearing when warranted. The Court set aside the Demand Notices and remanded the matters back to the 3rd respondent for a fresh inquiry, directing them to pass reasoned orders after affording ample opportunity of hearing to the petitioners, strictly in accordance with law, within four months.

Facts

The petitioners, M/s. Sreepada Minerals, are holders of Mineral Dealer Licenses and are registered under GST. The 3rd respondent, the District Mines and Geology Officer, Nellore, issued a show-cause notice alleging that the petitioner conducted business of 1,632 tons of Micaceous Quartz mineral during 2023-2024 without obtaining transit forms/passes. The petitioner submitted a reply denying the allegations. Subsequently, without considering the petitioner's explanation or providing a personal hearing, the 3rd respondent issued a Demand Notice dated August 20, 2024, imposing a penalty of Rs. 10,78,100/- for alleged breach of Rule 8(1) of the Andhra Pradesh Mineral Dealer’s Rules, 2017, and liability under Rule 26(3)(ii) and 34(1) of APMMC Rules, 1966. A similar demand notice was issued in a connected writ petition. Aggrieved, the petitioners filed these writ petitions.

Key Issues

1. Whether the Demand Notices issued by the 3rd Respondent are arbitrary, illegal, ultra vires, in contravention of the Principles of Natural Justice, and unconstitutional, specifically concerning the failure to consider the petitioner's explanation and provide a personal hearing, thereby violating the petitioner's legitimate rights and causing prejudice? (Question of law and fact, turning on principles of natural justice and procedural fairness under relevant mining rules). Petitioner's Arguments: The demand notices were issued without considering the petitioner's explanations to the show-cause notices. The petitioners contend they did not violate any provisions of law in their business activities. The impugned notices have caused severe prejudice, hardship, and irreparable loss. They seek setting aside of the demand notices. Revenue's Arguments: The learned Assistant Government Pleader for Mines and Geology opposed the grant of any reliefs and prayed for the dismissal of the writ petitions.