2016 (3) TMI 931 - HC - VAT and Sales Tax

Validity of Commissioner s order - Order passed without providing any reasons - Breach of principles of natural justice - Held that - Respondent is also unable to show any reasons supporting the operative portion of the Order passed by the Commissioner. It is also hardly required to be stated that unless some reason if not in detail but precise are recorded, the operative portion of the Order would not be backed by the reasons of the Authority who has ultimately passed the Order. Therefore, the order of the Commissioner set aside. - Matter remanded back

Summary

Issues: Lack of reasons in the Order passed by the Commissioner.

Analysis:
The High Court heard the appeals against the Order passed by the Commissioner of Commercial Taxes, setting aside the First Appellate Authority's decision and directing the issuance of a revised demand notice. The Court noted a crucial aspect of the case where the Commissioner failed to provide any reasons for the Order, merely reproducing the First Appellate Authority's reasons. The Court emphasized the importance of recording reasons by a quasi-judicial authority to ensure adherence to principles of natural justice and facilitate review by higher forums. The Government Pleader for the Respondent was unable to justify the lack of reasons in the Order, leading the Court to declare the Order as a non-speaking one, which is legally untenable.

The Court, therefore, set aside the impugned Order and directed the matter to be returned to the Commissioner for a fresh hearing. The Commissioner was instructed to provide an opportunity for the parties to present their case, record precise reasons, and pass a new Order supported by those reasons. This was deemed necessary for the Order to be legally valid and enforceable. The appeals were allowed to this extent, with no costs imposed due to the circumstances. Additionally, a pending application was disposed of in light of the final disposal of the appeals.