JUDGMENT

A. S. NAIDU, J. — What is assailed in this writ petition, filed under Articles 226 and 227 of the Constitution is the order dated 16.05.1998 (Annexure-10) passed by the Commissioner of Commercial Taxes, Orissa, Cuttack in a proceeding initiated under Section 10-A read with Section 10 (b) and Section 10 (d) of the Central Sales Tax Act, 1956.

2. The petitioner is a Government of India enterprise engaged in construction of a power plant for the purpose of generation and distribution of electricity at Kania in the dis¬trict of Angul. It is registered as a dealer under the Orissa Sales Tax Act, 1947 and the Central Sales Tax Act, 1956. In the year 1988, opposite party No. 3, the Sales Tax Officer, had issued declaration forms, commonly known as ‘C’ forms in favour of the petitioner for facilitating purchase of goods at a conces¬sional rate for the purpose of utilisation for Generation and Distribution of Electricity in respect of a list attached to the said order vide Annexure-1. Admittedly, a few more items of articles were added to the said list in the year 1994. The peti¬tioner-company purchased different items of articles by utilising the ‘C’ declaration form and paid tax at the concessional rate from the year 1988 onwards. In the year 1997, a notice was issued by opposite party No. 3 vide Annexure-2 alleging that the peti¬tioner had purchased goods which are not covered under the Cer¬tificate of Registration on the strength of declaration ‘C’ forms and had also utilised them for other purposes and that such action contravenes Sections 10 (b) and 10 (d) of the Central Sales Tax Act, 1956. The details of such purchases were given in the notice and the petitioner-company was called upon to show cause as to why penalty in lieu of prosecution shall not be imposed against it under Section 10-A of the Central Sales Tax Act, 1956.

Another notice was issued on 11.11.1997 calling upon the petitioner to show cause as to why a sum, not exceeding one and half times the tax, which would have been levied under Sub-section (2) of Section 8, shall not be imposed as penalty under Section 10-A of the Central Sales Tax Act. The petitioner-company preferred O.J.C. No. 17456 of 1997 in this Court challenging the said show-cause notice to be vague. This Court by order dated 16.12.1997 directed the petitioner to appear before the Assessing Officer, upon which further particulars shall be furnished for enabling the petitioner to show cause. The petitioner appeared on 23rd December, 1997 and filed preliminary show-cause. After a chequered career, the date of hearing was fixed to 05.02.1988 before the Sales Tax Officer (opp. party No. 3). It is averred that, Shri P. V. Ramana Rao, Deputy Manager (Finance) of the petitioner-company, was exclusively conversant with the entire case and records were entrusted to him. Since his younger brother expired in an unfortunate accident at Visakhapatnam, on 02.02.1998 the officer concerned was constrained to proceed to Visakhapatnam. On 05.02.1998, the Senior Manager (Finance) ap¬peared before the Sales Tax Officer and filed a petition for one month’s time on the ground that the officer who is in know of the matters is unable to appear due to the unfortunate and sad demise of his younger brother. The Sales Tax Officer (opp. party No. 3) with much difficulty adjourned the case only for four days and posted it to 10.02.1998. On the said date, another petition for adjournment was filed praying for a fortnight time to enable the concerned officer to appear and apprise the matter. The prayer was rejected and an order of penalty under Section 10-A of the Central Sales Tax Act, 1956 was passed imposing penalty of Rs. 5,02,55,561/-(Rupees Five Crores two lakhs fifty-five thousand five hundred sixty-one).

The petitioner filed a Revision along with a petition for stay before the Commissioner who disposed of the petition for interim stay on 16.03.1998 directing the petitioner to deposit Rs. 1.5 crore by 25.03.1998. Th