THE HONOURABLE SRI JUSTICE P.SAM KOSHY
AND
THE HONOURABLE SRI JUSTICE LAXMI NARAYANA ALISHETTY
Writ Petition No.25906 of 2023
ORDER: (per Hon'ble Sri Justice P.SAM KOSHY)
The instant Writ Petition has been filed by the
petitioner under Article 226 of the Constitution of India
assailing the order passed by the 1st respondent in
O.C.No.132 of 2023, dated 05.06.2023.
2. Heard Mr. Karthik Ramana Puttamreddy, learned counsel for the petitioner; Mr. Dominic Fernandes, learned Senior Standing Counsel for Central Board of Indirect Taxes & Customs, for respondent Nos.1 and 2; Mr. Gadi Praveen Kumar, learned Dy. Solicitor General of India, for respondent No.3; the learned Government Pleader for Commercial Tax, for respondent No.4; and the learned Government Pleader for Revenue, for the 5th respondent.
3. The assessing authority, pursuant to the impugned show-cause notice that was issued to the petitioner and to which the petitioner had also submitted a detailed reply, 2 PSK,J & LNA,J wp_25906_2023 passed the impugned order without dealing with any of the contentions put forth by the petitioner in its reply and, that too, by passing a one line order holding that the defence taken by the petitioner is of very general nature and not supported by law. Except for those few words, there is no other reason assigned whatsoever.
4. The challenge was primarily on the ground that the order lacks reasons and not a speaking order and therefore, the present writ petition.
5. So far as the order to be passed by a quasi-judicial authority or for that matter by an officer on the administrative side, reasons are the essence of order. In this regard, the law is by now well settled.
6. In the case of Kranti Associates (P) Limited vs. Masood Ahmed Khan 1 the Hon'ble Apex Court held at para No.51 as under :
"51. Summarizing the above discussion, this Court holds:
1
(2010) 9 SCC 496
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(a) In India the judicial trend has always been to record reasons, even in administrative decisions, if such decisions affect anyone prejudicially.
(b) A quasi-judicial authority must record reasons in support of its conclusions.
(c) Insistence on recording of reasons is meant to serve the wider principle of justice that justice must not only be done it must also appear to be done as well.
(d) Recording of reasons also operates as a valid restraint on any possible arbitrary exercise of judicial and quasi- judicial or even administrative power.
(e) Reasons reassure that discretion has been exercised by the decision maker on relevant grounds and by disregarding extraneous considerations.
(f) Reasons have virtually become as indispensable a component of a decision making process as observing principles of natural justice by judicial, quasi-judicial and even by administrative bodies.
(g) Reasons facilitate the process of judicial review by superior Courts.
(h) The ongoing judicial trend in all countries committed to rule of law and constitutional governance is in favour of reasoned decisions based on relevant facts. This is virtually the life blood of judicial decision making justifying the principle that reason is the soul of justice.
(i) Judicial or even quasi-judicial opinions these days can be as different as the judges and authorities who deliver them. All these decisions serve one common purpose which is to demonstrate by reason that the relevant factors have 4 PSK,J & LNA,J wp_25906_2023 been objectively considered. This is important for sustaining the litigants' faith in the justice delivery system.
(j) Insistence on reason is a requirement for both judicial accountability and transparency.
(k) If a Judge or a quasi-judicial authority is not candid enough about his/her decision making process then it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles of incrementalism.
(l) Reasons in support of decisions must be cogent, clear and succinct. A pretence of reasons or `rubber-stamp reasons' is not to be equated with a valid decision making process.
(m) It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decision making not only makes the judges and decision makers less prone to errors but also makes them subject to broader scrutiny. (See David Shapiro in Defence of Judicial Candor (1987) 100 Harward Law Review 731-737).
(n) Since the requirement to record reasons emanates from the broad doctrine of fairness in decision making, the said requirement is now virtually a component of human rights and was considered part of Strasbourg Jurisprudence. See (1994) 19 EHRR 553, at 562 para 29 and Anya vs. University of Oxford, 2001 EWCA Civ 405, wherein the Court referred to Article 6 of European Convention of Human Rights which requires, "adequate and intelligent reasons must be given for judicial decisions".
(o) In all common law jurisdictions judgments play a vital role in setting up precedents for the future. Therefore, for 5 PSK,J & LNA,J wp_25906_2023 development of law, requirement of giving reasons for the decision is of the essence and is virtually a part of "Due Process".
7. Similar view has been taken by a Division Bench of the High Court of Chattisgarh in Smt. Lata Goswami vs. State of Chhattisgarh 2, wherein the Court held at paragraph Nos.8 and 9 as under:
"8. In the case of East Coast Railway vs. Mahadev Appa Rao with K. Surekha Vs. Mahadeo Appa Rao [reported in 2010 (7) SCC 678], the Supreme Court in a very categorical terms has held that "arbitrariness" in making of an order by an authority can manifest itself in different forms. Every order passed by a public authority must disclose due and proper application of mind by the person making the order. Application of mind is best demonstrated by disclosure of mind by the authority making the order and disclosure is best done by recording the reasons that led the authority to pass the order in question. Absence of reasons either in the order passed by the authority or in the record contemporaneously maintained is clearly suggestive of the order being arbitrary hence legally unsustainable. In the absence of reasons in support of the order it is difficult to assume that the authority had properly applied its mind before passing of the order.
2
2015:CGHC:9478-DB
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9. Likewise, again in case of Assistant Commissioner, Commercial Tax Department, Works Contract and Leasing, Kota vs. Shukla and Brothers [reported in 2010 (4) SCC 785], the Supreme Court has held that "recording of reasons is an essential feature of dispensation of justice. Reasons are the soul of orders. Non-recording of reasons could lead to dual infirmities; firstly, it may cause prejudice to the affected party and secondly, more particularly, hamper the proper administration of justice. A judgment without reasons causes prejudice to the person against whom it is pronounced, as that litigant is unable to know the ground which weighted with the authority in rejecting him claim and also causes impediments in his taking adequate and appropriate grounds before the higher court in the event of challenge to that order."
8. In view of the aforesaid legal pronouncements, as has been reflected in the preceding paragraphs, we have no hesitation in reaching to the conclusion that the impugned order passed by the 1st respondent in O.C.No.132 of 2023, dated 05.06.2023 is not a reasoned and speaking order.
Therefore, the same is unsustainable and deserves to be set aside. Accordingly, the same is set aside and the Writ Petition is allowed.
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9. The matter is remanded to the 1st respondent with a direction to pass a reasoned and speaking order duly taking into account the reply submitted by the petitioner to the show-cause notice dated 27.04.2022 and communicate the same to the petitioner. No costs.
10. As a sequel, miscellaneous applications pending if any in this petition, shall stand closed.
__________________ P.SAM KOSHY, J ___________________________________ LAXMI NARAYANA ALISHETTY, J Date : 25.09.2023 Ndr