2024 (10) TMI 1036 - HC - GST

Challenge to adjudication order - blocking the Petitioner's credit ledger - no personal hearing was granted - violation of principles of natural justice - HELD THAT - There is hardly any discussion and in any event, there are no reasons to sustain the findings. As noted earlier, the Petitioner had filed a fairly detailed response to the show cause notice. Most of the contentions raised in the response have not been addressed or considered. Simply stating that the adjudicating officer finds that the demand or interest is recoverable does not amount to giving any reasons. Furnishing reasons is now accepted as one of the essential concomitants of the principles of natural justice and fair play. It is only based on reasons that the Appellate Authority can discern the basis for the decision that may be appealed against. An order bereft of reasons renders the right to appeal, which is a valuable right, nugatory. The impugned order contains no reasons but only conclusions. To say that I find that the tax, interest, or penalty is payable is merely an ipse dixit. The impugned order neither discusses the Petitioner s response nor gives any independent reasons supporting the conclusion or finding. The impugned order is unreasoned and non-speaking. Such orders cannot be sustained. The impugned order dated 03 July 2023 is set aside on the above short ground. The matter is remanded to the 4th Respondent for fresh adjudication following the law. The 4th Respondent must hear the Petitioner and pass a speaking order within six weeks from today - Petition allowed.

Summary

Issues:
Challenge to adjudication order by Deputy Commissioner of State Tax and blocking of credit ledger.

Analysis:
The petitioner challenged an adjudication order dated 03 July 2023 by the Deputy Commissioner of State Tax and an order blocking the petitioner's credit ledger. The challenge to a show cause notice dated 04 August 2022 was not pressed, and the challenge to the order blocking the credit ledger was deemed unnecessary as it had been unblocked. The focus was on the impugned order dated 03 July 2023, which lacked reasons for its conclusions. The petitioner had responded to the show cause notice with detailed contentions, but the impugned order failed to address or consider these contentions adequately. The court emphasized the importance of providing reasons in decisions, stating that reasons are essential for the right to appeal and are indicative of the application of mind. An order without reasons, containing only conclusions, especially by a judicial or quasi-judicial authority, is unsustainable. Citing legal precedents, the court highlighted that unreasoned orders are considered non-speaking and cannot be upheld.

The court found the impugned order lacking in reasons and set it aside on that basis. The matter was remanded to the Deputy Commissioner for fresh adjudication following the law, with a directive to provide a speaking order within six weeks and to hear the petitioner. The court made the rule absolute without costs for orders, emphasizing that all parties must act upon the authenticated copy of the order. This detailed analysis underscores the significance of providing reasoned decisions in legal proceedings to ensure fairness, natural justice, and the right to appeal.