2015 (8) TMI 1275 - HC - Service Tax

Why the matter be not remanded to the Tribunal for having passed a non-speaking order hindering judicial review - payment of service tax on reverse charge basis through Cenvat Credit - Held that - any order amenable to challenge and/or consideration before a superior Forum has to be reasoned containing brief narration of essential facts contentions of the parties and then the conclusion to facilitate judicial review for the manner in which the authority concerned may have applied its mind. Even if an appellate order of affirmance or relying on any other similar orders may not be as elaborate as an original order but nonetheless it must contain a brief discussion to facilitate the superior Court or Forum to understand and appreciate the manner in which there has been application of mind. Therefore the order dated 17.10.2014 is set aside and the matter is remanded to the Tribunal to hear the parties afresh and pass a reasoned and speaking order. - Decided in favour of appellant

Summary

Issues involved:
1. Lack of reasoning in the order passed by the Customs, Excise and Service Tax Appellate Tribunal.
2. Requirement of a reasoned order for judicial review.
3. Remand of the matter to the Tribunal for a speaking order.
4. Possibility of proceeding ex parte against the Respondent.

Analysis:

1. The High Court addressed the issue of lack of reasoning in the order passed by the Customs, Excise and Service Tax Appellate Tribunal. The Court noted that the order under challenge did not provide a clear explanation of the facts and the controversy involved. It emphasized that any order subject to challenge must contain a brief narration of essential facts, contentions of the parties, and a conclusion to enable judicial review. The Court highlighted the necessity for even appellate orders to have a brief discussion to aid superior courts in understanding the application of mind by the concerned authority.

2. Referring to legal precedents, including a Supreme Court decision, the High Court reiterated the importance of a reasoned order for affirmation by appellate authorities. It emphasized that while an order of affirmation need not be as elaborate as a reversal order, it still must contain some reasons, at least in brief, to demonstrate the application of mind by the appellate authority. The Court emphasized that the absence of reasons in an appellate order indicates a lack of application of mind, which hinders the judicial review process.

3. Consequently, the High Court set aside the order dated 17.10.2014 and remanded the matter to the Tribunal for a fresh hearing. The Court directed the Tribunal to pass a reasoned and speaking order after hearing the parties afresh. This decision aimed to ensure that the Tribunal provides a clear and reasoned decision that facilitates effective judicial review and demonstrates proper consideration of the case.

4. Additionally, the High Court authorized the Tribunal to proceed ex parte against the Respondent if they fail to appear after being served notice pursuant to the remand. In such a scenario, the Tribunal was instructed to briefly record the reasons for proceeding ex parte. This provision aimed to ensure procedural fairness and efficiency in case of non-appearance by the Respondent during the remand proceedings.

In conclusion, the High Court allowed the appeal, emphasizing the importance of reasoned orders for effective judicial review and directing the Tribunal to conduct a fresh hearing and provide a speaking order in the remanded matter.