Penal liability can only be imposed after fulfilling the principles of natural justice, including providing copies of reports and conducting proper enquiries.

1. In all these cases, the petitioners have challenged the penalty imposed for the alleged illicit quarrying.

2. The writ petitioner in W.P.No.6042 of 2003, is the owner of patta land measuring 80 cents in survey No.464/1 and 20 cents in survey No.905/1 in Nagojanahalli village, Krishnagiri taluk, Dharmapuri District, which contains gray granite deposit. The Government in G.O.Ms.No.960, Industries Department dated 16.8.1994, reserved the entire gray granite deposited areas of Dharmapuri District including those in patta lands for exploitation by the State owned Corporation, viz., Tamil Nadu Minerals Limited. Challenging the said Government Order, the petitioner filed W.P.No.6154 of 1989 and there was an order of injunction in favour of the petitioner up to 12.10.1990. On that date, the Division Bench, while dismissing the writ petition, upheld the validity of the G.O. in a batch of writ petitions.

(a) It is stated that some of the aggrieved persons approached the Supreme Court and there was an order of status quo as on 12.10.1990, based on which the petitioner was permitted to quarry continuously and the petitioner paid the seigniorage fees to transport the materials quarried and for transport permit and the petitioner paid a sum of Rs.96,372/- in excess. Since the transport permit was not granted in respect of granite quarried before 12.10.1990, the petitioner filed W.P.No.789 of 1991, which was allowed on 22.3.1991 directing the respondent to issue transport permit to transport the granite blocks quarried prior to 12.10.1990, for which seigniorage fees had already been paid.

(b) Since the petitioner had already paid the seigniorage fees, with the support of the order passed in the writ petition in W.P.No.789 of 1991, he is stated to have transported the total quarried materials of 147-306 Cbm to meet foreign supply and according to the petitioner, the seigniorage fee for the said quarried goods was Rs.29,461.20 and the petitioner had already paid Rs.96,372 and hence, the petitioner is entitled for refund of Rs.66,910.80. According to the petitioner, thereafter he has not removed any stone quarried and the entire blocks are still lying unfit for export. The petitioner has been involved in 100% export business and the said 147-306 Cbm was the only marketable quantity of stones transported and exported and the Village Administrative Officer has also taken the measurement of rest of blocks and reported to the respondent stating that the left out blocks are 12 undressed blocks.

(c) It is stated that out of the marketable blocks of 59 from the total production of 92 blocks, 32 were already exported and 15 blocks were dressed and kept at the quarry and 12 are to be dressed. Therefore, according to the petitioner, there is no illicit transport. The respondent sent a notice on 14.8.1991 alleging that out of 92 blocks only 27 blocks were found at the quarry site and 65 were not found. Except 32 which had been exported, all other blocks are dumped in the quarry site. After the notice dated 14.8.1991, the petitioner appeared before the respondent and explained that there was no illicit transport and thereafter, it is stated that the District Collector has presumably dropped all proceedings. However, after 10 years, the respondent sent a notice dated 11.4.2001 alleging that 275-551 Cbm was illicitly transported and issued a show-cause notice, as to why penalty of a sum of Rs.10,44,354/- should not be levied which includes seigniorage of Rs.55,111/-, local cess of Rs.24,800/-, local cess surcharge of Rs.1,37,778/- and penalty amount (15 time of local cess) Rs.8,26,665/-.

(d) According to the petitioner, as per the judgment of the Supreme Court, the State Government has no jurisdiction to levy or demand or collect local cess and local cess surcharge. The petitioner gave a reply on 16.5.2001 denying the allegations and also stated that the petitioner stopped quarrying in the year 1990 itself. After the reply was given, there was no