1985 (10) TMI 262 - HC - VAT and Sales Tax

Summary

Issues:
1. Challenge to the order of the Government rejecting an application for waiver of penalty under the Karnataka Sales Tax Act, 1957.
2. Consideration of whether the order made by the Government under section 13(2A) of the Act is subject to judicial review under article 226 of the Constitution.
3. Examination of the necessity for the application of mind and reasons in administrative orders, in light of the Supreme Court's ruling in Siemens Engineering case and a Division Bench ruling of the High Court.
4. Determination of the validity of the order made by the Government and the issuance of a mandamus for re-examination of the application by the petitioner.

Detailed Analysis:
1. The petitioner, an assessee under the Karnataka Sales Tax Act, challenged the Government's order rejecting its application for waiver of penalty. The petitioner contended that the Government should have provided an opportunity for an oral hearing before rejecting the application, citing violations of natural justice principles. The petitioner sought a writ of mandamus to waive the penalty entirely. The case was referred to a Division Bench due to doubts regarding previous judgments.

2. The Government argued that the petitioner was only seeking a concession and not entitled to an oral hearing. The Government also contended that the order under section 13(2A) was not reviewable under article 226 of the Constitution. However, the Court held that orders made by the Government under the Act are not immune from judicial review under article 226, rejecting the Government's contention based on a Supreme Court ruling.

3. The Court emphasized the necessity for the application of mind and providing reasons in administrative orders, referencing the Supreme Court's ruling in the Siemens Engineering case. The Court disagreed with a previous High Court ruling that suggested reasons for rejecting requests for waiver were not mandatory under section 13(2A) of the Act. The Court overruled this view, stating that orders subject to judicial review must demonstrate a genuine application of mind.

4. After detailed examination, the Court found the Government's order to be arbitrary and lacking a genuine application of mind. The Court quashed the order and directed the Government to re-examine the petitioner's application and pass appropriate orders in accordance with law. The Court also directed the petitioner to maintain any bank guarantee until the matter was resolved. The writ petition was disposed of with each party bearing their own costs, and the order was to be communicated to the respondent within ten days.