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TMI Blog1993 (1) TMI 258X X X X Extracts X X X X X X X X Extracts X X X X ..... de name "Nitex". On December 10, 1982, at night time there was accidental fire which affected the entire industrial estate; the opponents suffered huge loss of property; their account books, their stock, furniture, machinery, etc., were destroyed in the fire; on December 16, 1982, the opponents filed applications under section 55 of the Sales Tax Act for granting exemption from payment of sales tax at least for a period of one year and in the alternative to grant a tangible remission or relief from payment of the sales tax. In support of those applications the opponents relied upon the report submitted by the Chief Officer of the Fire Brigade, the statements recorded by the police officer and their not having received the claims from the Insurance Company to the extent of loss sustained by them. The opponents further submitted an additional application on January 30, 1983. Those applications were rejected by the Sales Tax Commissioner, Gujarat State, by his order dated December 17, 1984, by only stating that the case of the opponents was not such that remission could be granted. Against the orders passed by the Sales Tax Commissioner, the opponents preferred Appeal Nos. 10/85 to 24 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be prescribed, remit the whole or any part of the tax payable, in respect of any period, by any dealer." "Rule 49. Remission of tax in cases of loss due to calamities, etc.- (1) Subject to the provisions of sub-rule (2), the Commissioner may remit the whole or any part of the tax payable in respect of any period by a registered dealer if such registered dealer has suffered financially on account of riot or any natural calamity. (2) No remission of tax shall be made under this rule- (a) except on an application made in that behalf to the Commissioner by the registered dealer setting forth, (i) the details regarding the riot or as the case may be, the natural calamity, (ii) the exact amount of loss sustained by him, (iii) the extent of relief prayed for and the reasons therefor, and (iv) the details regarding realisation of any claim prepared under any insurance or receipt of any grant-in-aid. (b) if the loss has been substantially mitigated by the realisation of any claim preferred under any insurance or on receipt of any grant-in-aid. (3) The Commissioner may for sufficient reasons, remit the whole or any part of the tax payable in respect of any period by any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not suffered financial loss because of riot or natural calamity and that the say of the dealer is required to be rejected for some reasons. Further, sub-rule (2) of rule 49 also indicates that before rejecting the application the Commissioner must give reasons for rejecting it. Sub-clause (i) of clause (a) of sub-rule (2) specifically provides that in an application which is filed by the registered dealer the details regarding the riot or as the case may be, the natural calamity should be stated. Sub-clause (ii) further provides that the exact amount of loss sustained by the registered dealer is also required to be stated. Sub-clause (iii) further provides that the registered dealer must state the extent of relief prayed for and the reasons therefor. This would indicate that even in the application which is filed by the registered dealer, he must give reasons in support of the relief claimed by him. Hence for deciding the application which is submitted by the registered dealer, the Commissioner is required to apply his mind to the reasons stated in support of the relief prayed for by the dealer. This would also indicate that the Commissioner must record reasons before rejecting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of tax, penalty or interest under section 55 no appeal and no application for revision shall lie. We are not required to consider what is the effect of this clause in these references, but at the relevant time the order passed under section 55(2) was appealable. Hence the Commissioner was required to assign reasons before rejecting the application so that the aggrieved party acquires the knowledge of the reasons for not accepting his case and it also can demonstrate before the appellate authority that the reasons assigned by the authority in rejecting his application were erroneous, irrational, irrelevant or arbitrary. Quasi-judicial orders: Apart from this specific provision, it is clear that the Sales Tax Commissioner was exercising quasi-judicial powers under section 55 of the Act. It is well-settled law that where an authority makes an order in exercise of a quasi-judicial function, it must record its reasons in support of the order it makes. Every quasi-judicial order must be supported by reasons (reference may be made to a decision in the case of Woolcombers of India Ltd. v. Woolcombers Workers' Union AIR 1973 SC 2758, Siemens Engineering and Manufacturing Co. of Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cess of decision-making. The court has further observed in paragraphs 38 and 39 as under: "38. The object underlying the rules of natural justice 'is to prevent miscarriage of justice' and secure 'fair play in action'. As pointed out earlier the requirement about recording of reasons for its decision by an administrative authority exercising quasi-judicial functions achieves this object by excluding chances of arbitrariness and ensuring a degree of fairness in the process of decision-making. Keeping in view the expanding horizon of the 'principles of natural justice, we are of the opinion, that the requirement to record reason can be regarded as one of the principles of natural justice which govern exercise of power by administrative authorities. The rules of natural justice are not embodied rules. The extent of their application depends upon the particular statutory framework whereunder jurisdiction has been conferred on the administrative authority. With regard to the exercise of a particular power by an administrative authority including exercise of judicial or quasi-judicial functions the Legislature, while conferring the said power, may feel that it would not be in the large ..... X X X X Extracts X X X X X X X X Extracts X X X X
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