2024 (10) TMI 206 - HC - GST

Rejection of appeal - neither any order has been passed nor any reason has been assigned for rejecting the appeal - violation of principles of natural justice - HELD THAT - It is not in dispute that the petitioner has filed an appeal, which has been rejected by the impugned order dated 22.7.2024 wherein no reason has been assigned. On the strength of instruction filed today, learned Standing Counsel has tried to support the action of the respondent, however, on perusal of the instructions, it shows that no reason whatsoever has been assigned for rejecting the appeal of the petitioner. It only refers the delay in submission of appeal, which shows that while rejecting the appeal of the petitioner, the appellate authority has not applied its mind. It is settled law that reason is the heartbeat of every conclusion. An order without valid reasons cannot be sustained. To give reasons is the rule of natural justice. One of the most important aspect for necessitating to record reason is that it substitutes subjectivity with objectivity. It is well settled that not only the judicial order, but also the administrative order must be supported by reasons recording in it. Hon'ble Supreme Court, in the cases of Assistant Commissioner, Commercial Tax Department, Works Contract Leasing, Kota Vs. Shukla Brothers 2010 (4) TMI 139 - SUPREME COURT , M/s Travancore Rayon Ltd. v. Union of India 1969 (10) TMI 23 - SUPREME COURT have observed that the administrative authority and the tribunal are obliged to give reasons, absence whereof would render the order liable to judicial chastisement. Once the reason has not been assigned by the competent authority for levying the penalty then on this ground alone, the impugned orders cannot be sustained. The impugned orders passed in both the writ petitions cannot be sustained in the eyes of law and same are hereby quashed - Petition allowed.

Summary

Issues:
Challenge to rejection of appeal without assigning reasons.

Analysis:
The judgment by Hon'ble Piyush Agrawal, J. dealt with two writ petitions concerning the rejection of appeals without providing reasons. The court decided to consolidate the cases due to the similarity in the issues. The petitioner sought the quashing of orders rejecting their appeal without reason. The petitioner argued that the appeal rejection lacked proper justification, as only a notice was issued without specifying any grounds. On the other hand, the respondent, supported by Mr. Arvind Mishra, contended that the appeal was rejected due to being time-barred, and reasons were available for download on the official website. The court examined the records and instructions provided by the Standing Counsel, noting that the rejection lacked a valid reason. The court emphasized the importance of providing reasons in administrative and judicial orders, citing precedents such as Assistant Commissioner, Commercial Tax Department, Works Contract & Leasing, Kota Vs. Shukla & Brothers and M/s Travancore Rayon Ltd. v. Union of India, highlighting that orders without reasons are unsustainable. Consequently, the court quashed the impugned orders in both writ petitions, emphasizing the necessity of reasoned decisions.

The court's decision was based on the fundamental principle that reasons are essential for any conclusion to be valid. The lack of reasons in the rejection of the petitioner's appeal rendered the impugned orders unsustainable. Citing legal precedents, the court emphasized that both administrative and judicial orders must be supported by reasons to ensure objectivity and fairness. The court's ruling to quash the orders and remand the matter for a fresh decision by the appellate authority within three months underscores the significance of providing reasoned and speaking orders in legal proceedings. The judgment serves as a reminder of the importance of transparency and justification in administrative actions, safeguarding the rights of individuals seeking redress through legal avenues.