2019 (5) TMI 501 - HC - VAT and Sales Tax

Exemption under Section 4-A of the U.P. Trade Tax Act, 1948 - Eligibility Certificate - it was alleged that Bill supplied by the applicant for fabrication of moulds were not genuine and as such they can not be relied upon - principles of natural justice - HELD THAT - A perusal of the order of the Commercial Tax Tribunal, it is clear that they have merely reiterated the order of the first appellate authority and in the conclusion that they have not given any finding on any questions either of fact or law raised by the revisionist and concluded that the revisionist has not discharged his duty and submitted the relevant documents and therefore, the appeal has been rejected. It is a settled canon of legal jurisprudence that the Courts are vested with discretionary powers but such powers are to be exercised judiciously, equitably and in consonance with the settled principles of law. Whether or not, such judicial discretion has been exercised in accordance with the accepted norms, can only be reflected by the reasons recorded in the order impugned before the higher Court. Often it is said that absence of reasoning may ipso facto indicate whimsical exercise of judicial discretion. The said order has been passed without any application of mind and without considering the grounds raised by the revisionist in the appeal. The Tribunal being a quasi judicial body, it was incumbent upon them to consider all the grounds raised by the revisionist in its appeal and give the finding on each of the issues raised by them. It seems that the Tribunal has not given its finding or even mentioned the grounds raised by the revisionist in the appeal - Matter remanded to the Tribunal to reconsider the same after giving opportunity of hearing to the revisionist and further directed to pass reasoned and speaking order, expeditiously, say within a period of six months from the date of certified copy of this order is produced before him. Revision allowed by way of remand.

Summary

Issues involved:
- Rejection of application for grant of Eligibility Certificate under Section 4-A of the U.P. Trade Tax Act, 1948.
- Appeal before the Tribunal and subsequent dismissal.
- Lack of proper reasoning in the Tribunal's order.
- Legal principles regarding the necessity of providing reasons in judicial orders.

Analysis:
The case involved the revisionist, who established a new unit for manufacturing PVC containers and subsequently expanded to manufacture PET Bottles, Mineral water, and Insulated wares. The revisionist applied for an exemption under Section 4-A of the U.P. Trade Tax Act, 1948. The application for an Eligibility Certificate was rejected by the competent authority citing reasons such as the bill supplied for fabrication of molds not being genuine and the revisionist already being engaged in the manufacturing of mineral water under a different name. This rejection led to an appeal before the Tribunal, which remanded the matter for further adjudication. However, the Divisional Level Committee rejected the application again, leading to another unsuccessful appeal before the Tribunal due to alleged non-submission of evidence by the revisionist and lack of connection with the business of M/S Multi Minerals.

The revision was filed challenging the Tribunal's order, highlighting the lack of proper reasoning in the Tribunal's decision-making process. The High Court emphasized the importance of providing valid reasons in judicial orders, citing various legal precedents. The Court referred to the case law of Uma Charan Singh v State of U.P., emphasizing that an order without valid reasons cannot be sustained, and giving reasons is a rule of natural justice. The Court further quoted the Supreme Court's stance on the necessity of reasons in judicial orders to ensure transparency, fairness, and the right of every litigant to know the basis of the decision.

The High Court found that the Tribunal had not applied its mind, considered the grounds raised by the revisionist, or provided any findings on the issues raised in the appeal. As a result, the High Court allowed the revision, quashed the Tribunal's order, and remanded the matter back to the Tribunal for reconsideration. The Tribunal was directed to provide an opportunity for the revisionist to be heard, pass a reasoned order, and do so expeditiously within six months. The Court reiterated the importance of providing reasons in judicial orders to ensure a fair and just decision-making process.