2019 (5) TMI 651 - HC - VAT and Sales Tax

Principles of natural justice - main ground which has been canvassed by the revisionist is that entire assessment proceedings were exparte - HELD THAT - Reason is the very life of law. When the reason of a law once ceases, the law itself generally ceases. Such is the significance of reasoning in any rule of law. Giving reasons furthers the cause of justice as well as avoids uncertainty. As a matter of fact it helps in the observance of law of precedent. Absence of reasons on the contrary essentially introduces an element of uncertainty, dissatisfaction and give entirely different dimensions to the questions of law raised before the higher/appellate courts. The court should provide its own grounds and reasons for rejecting claim/prayer of a party whether at the very threshold i.e. at admission stage or after regular hearing, howsoever concise they may be. The order dated 07.11.2007 passed by the Trade Tax Tribunal is set-side and the matter is remanded to the Trade Tax Tribunal to be decided afresh in accordance with law after affording an opportunity of hearing to the revisionist - revision allowed by way of remand.

Issues Involved:
1. Legality of ex parte assessment proceedings.
2. Validity of the service of notice.
3. Adequacy of reasons provided by the Trade Tax Tribunal in its judgment.
4. Principles of natural justice and requirement of recording reasons in judicial orders.

Issue-wise Detailed Analysis:

1. Legality of ex parte assessment proceedings:
The revisionist contended that the assessment proceedings were conducted ex parte, which was contrary to statutory provisions. The survey conducted on 09.01.2002 led to an ex parte assessment order dated 15.02.2003, raising a demand of ?48,000/- for the assessment year 2000-01 without providing the revisionist an opportunity to be heard. Despite moving an application under Section 30, the revisionist did not appear before the assessing authority, leading to the finalization of the assessment ex parte on 03.11.2003 based solely on the survey report.

2. Validity of the service of notice:
The revisionist argued that no person named Shri Sabir was employed by him, disputing the claim that the notice was duly served. The first appellate authority directed the Assessing Officer to provide the diary found during the survey, but no records were produced. The first appeal was allowed on 31.05.2005. However, the Trade Tax Tribunal, in its order dated 07.11.2007, held that the service of notice was sufficient as it was served upon Shri Sabir, an alleged employee of the revisionist. The Tribunal decided the second appeal in favor of the department without the revisionist's appearance.

3. Adequacy of reasons provided by the Trade Tax Tribunal in its judgment:
The Tribunal’s order dated 07.11.2007 was criticized for lacking adequate reasons. The Tribunal failed to consider the merits of the revisionist's case and did not record any reasons for setting aside the first appellate authority's order. The Tribunal did not deliberate on or consider any legal provisions, rendering its order unsustainable. The Court emphasized that the Tribunal must provide adequate reasons for its findings, indicating proper handling of the case and due application of mind.

4. Principles of natural justice and requirement of recording reasons in judicial orders:
The Court highlighted the principle that judicial orders must be supported by reasons, as established by the Hon’ble Supreme Court in multiple cases. Reasons are essential for transparency, fairness, and meaningful appellate review. The absence of reasons in the Tribunal’s order violated the principles of natural justice, making the order indefensible. The Court cited several Supreme Court judgments underscoring the necessity of recording reasons to ensure justice and provide clarity for further appeals.

Conclusion:
The Court found that the Trade Tax Tribunal’s order dated 07.11.2007 was unsustainable due to the lack of recorded reasons and failure to consider the revisionist's case on merits. The order was set aside, and the matter was remanded to the Trade Tax Tribunal for a fresh decision in accordance with the law, after affording an opportunity of hearing to the revisionist. The Tribunal was directed to decide the revision within six months from the date a certified copy of the order is produced. The revision was allowed with these directions.

← Previous Next →