2024 (3) TMI 122 - HC - VAT and Sales Tax

Violation of the principles of natural justice - impugned order is non-reasoned as the application for recall of the order was considered as application for rectification of mistake only - failure to consider the explanation of the Revisionist as sufficient cause for non- appearance on the date (07.12.2016) on which hearing was fixed - date of which certified copy of the Order dated 08.12.2016 is obtained, is to be considered as the date from which limitation period commences under the Uttar Pradesh Trade Tax Act, 1948 or Uttar Pradesh Value Added Tax Act, 2008 - affidavit of the Revisionist is enough to establish that the copy of order was not served upon the Revisionist - HELD THAT - Absence of reasoning would render the judicial order liable to interference by the higher court. Reasons are the soul of the decision and its absence would render the order open to judicial scrutiny. The consistent judicial opinion is that every order determining rights of the parties in a Court of law ought not to be recorded without supportive reasons. Issuing reasoned order is not only beneficial to the higher courts but is even of great utility for providing public understanding of law and imposing self- discipline in the Judge as their discretion is controlled by well- established norms. Absence of reasoning is impermissible in judicial pronouncement. It is the duty cast upon the Appellate Authority that even if it is in agreement with the view taken by the first Appellate Authority, it should give its own reasons/findings which may indicate that there has been application of mind and also the consideration of grounds raised in the appeal by the revisionist. In absence of reasons it is difficult to come to a conclusion that there has been any application of mind by the Tribunal and such an order in the opinion of the Court cannot be sustained and deserves to be set aside. The question posed for consideration in the revisions is answered in favour of the assessee and it is held that the Tribunal has committed manifest error of law in not complying the provisions of Clause 5 of Section 63 of the Rules, 2008 - the impugned order dated 08.12.2016 is hereby set-aside - revision allowed.

Summary

Issues Involved:

1. Violation of principles of natural justice.
2. Incorrect application of inter-state sale exemption.
3. Imposition of penalty.
4. Non-reasoned and non-speaking orders.

Summary:

1. Violation of Principles of Natural Justice:
The assessee challenged the common judgment and order dated 08.12.2016 passed by the Commercial Tax Tribunal, Lucknow, which dismissed the second appeals due to the non-presence of the assessee or his counsel. The Tribunal's order was argued to be non-reasoned and passed without affording an opportunity of hearing to the assessee. The Court noted that Rule 63 of the Uttar Pradesh Value Added Tax Rules, 2008 mandates that the judgment in appeal shall be in writing, stating the points of determination, the decision thereon, and the reasons for such decision. The Tribunal failed to comply with these requirements, rendering the order unsustainable.

2. Incorrect Application of Inter-State Sale Exemption:
The assessee contended that the sales in question were inter-state sales, exempt from tax under Section 6(2) of the Central Sales Tax Act, 1956. The Deputy Commissioner of Commercial Taxes, Lucknow, denied this claim, which was upheld by the Additional Commissioner and subsequently by the Tribunal. The Court found that the Tribunal did not adequately address the assessee's arguments or provide sufficient reasoning for its decision.

3. Imposition of Penalty:
The Tribunal upheld the penalty imposed on the assessee for the years 2008-2009 and 2010-2011. The assessee argued that the penalty was unjustified as there was no intention to evade tax, and mere blank columns in Form 38 should not lead to penalty imposition. The Court noted that the Tribunal's order lacked reasoning and failed to consider the assessee's explanations.

4. Non-Reasoned and Non-Speaking Orders:
The Court emphasized that an order without valid reasons cannot be sustained, as it violates the principles of natural justice. The Tribunal's order dated 08.12.2016 was found to be non-reasoned and cursory. The Court cited several Supreme Court judgments highlighting the necessity of recording reasons in judicial orders.

Conclusion:
The impugned order dated 08.12.2016, along with the consequential orders dated 04.11.2022, were set aside. The matter was remanded to the Tribunal for fresh consideration, with directions to provide a reasoned order in compliance with Rule 63 of the Rules, 2008, within three months. The Court also instructed the parties not to seek unnecessary adjournments. The revisions were allowed in these terms.