2023 (10) TMI 482 - HC - GST

Principles of natural justice - cancellation of GST registration of petitioner - no cogent reason given for cancelling the GST registration of the petitioner - HELD THAT - From the perusal of the impugned order, it transpires that the same has been passed without recording any cogent reason for cancelling the GST registration of the petitioner and appellate authority has also dismissed the appeal filed by the petitioner summarily without assigning any reason. An order without valid reasons cannot be sustained. To give reasons is the rule of natural justice, highlighting this rule, Hon'ble Supreme Court held in the case of SECRETARY CURATOR VICTORIA MEMORIAL HALL VERSUS HOWRAH GANATANTRIK NAGRIK SAMITY ORS. 2010 (3) TMI 1059 - SUPREME COURT held that it is evident that the recording of reasons is principle of natural justice and every judicial order must be supported by reasons recorded in writing. It ensures transparency and fairness in decision making. The person who is adversely affected may know, as why his application has been rejected. Providing of reasons in orders is of essence in judicial proceedings. Every litigant who approaches the Court with a prayer is entitled to know the reasons for acceptance or rejection of such request. Either of the parties to the lis has a right of appeal and, therefore, it is essential for them to know the considered opinion of the Court to make the remedy of appeal meaningful - It is the reasoning which ultimately culminates into final decision which may be subject to examination of the appellate or other higher Courts. It is not only desirable but, in view of the consistent position of law, mandatory for the Court or Authority to pass orders while recording reasons in support thereof, however, brief they may be. It is a settled canon of legal jurisprudence that the Courts/Authorities are vested with discretionary powers but such powers are to be exercised judiciously, equitably and in consonance with the settled principles of law. Reason is the heart beat of every conclusion. In the absence of reasons the order becomes lifeless. Non recording of reasons renders the order to be violative of principles of natural justice. Reasons ensures transparency and fairness in decision making. It enables litigant to know reasons for acceptance or rejection of his prayer. It is statutory requirement of natural justice. Reasons are really linchpin to administration of justice. It is link between the mind of the decision taker and the controversy in question. Thus failure to give reasons amounts to denial of justice. Petition allowed.

Summary

Issues:
The judgment involves the cancellation of GST registration of a proprietorship firm engaged in civil construction works by the Assistant Commissioner and Additional Commissioner, without providing valid reasons, leading to an appeal and subsequent writ petition.

Cancellation of GST Registration:
The petitioner, a proprietorship firm, received a show cause notice for cancellation of GST registration without a specified date and time for appearance, as required by Section 29(2) of the Act. The order cancelling the registration lacked cogent reasons, violating the rule of natural justice. The appellate authority summarily dismissed the appeal without providing any valid grounds. The court emphasized the importance of giving reasons for administrative and judicial orders, citing precedents that highlight the necessity of reasons for transparency, fairness, and the right of the litigant to understand the basis of the decision. The Supreme Court's rulings in various cases stressed that reasons are the heartbeat of every conclusion, and without them, the order becomes lifeless. Consequently, the High Court set aside the impugned orders and remitted the matter back to the first appellate authority to pass a fresh, reasoned order in accordance with the law within two months.

Judicial Discretion and Reasoning:
The judgment underscored that providing reasons in orders is essential in judicial proceedings to ensure transparency, fairness, and the right of litigants to understand the basis for the acceptance or rejection of their requests. The court highlighted that the absence of reasons renders the order indefensible and unsustainable, particularly when subject to further challenge before higher forums. It was emphasized that the exercise of judicial discretion must align with established legal principles and be reflected in the reasons recorded in the order. Failure to provide reasons amounts to a denial of justice, as reasons are the linchpin to the administration of justice. The court reiterated that the right to reason is an indispensable part of a sound judicial system, ensuring that the affected party knows why a decision has gone against them. The judgment cited various legal precedents to support the importance of recording reasons in writing, as it is a fundamental principle of natural justice and a requirement for a meaningful remedy of appeal.