Telangana High Court
M/S. Suryalatha Spinning Mills Limited vs Deputy Commissioner St Stu2 on 20 February, 2025
THE HON'BLE THE ACTING CHIEF JUSTICE SUJOY PAUL
AND
THE HON'BLE SMT. JUSTICE RENUKA YARA
WRIT PETITION No.4481 of 2025
ORDER:
(Per the Hon'ble the Acting Chief Justice Sujoy Paul)
Sri Karthik Ramana Puttamreddy, learned counsel for the
petitioner and Sri T.Chaitanya Kiran, learned counsel
representing Sri Swaroop Oorilla, learned Special Government
Pleader for State Tax, for respondent Nos.1 to 3.
2. This petition assails the order passed by the learned
Appellate Authority dated 21.01.2025 (Ex.P.2). The singular
ground of attack is that the petitioner feeling aggrieved by the
order dated 26.07.2023 preferred a detailed appeal, in which
grounds are elaborated in nine paragraphs (four pages). The
learned Appellate Authority has reproduced the relevant portion of
the order under challenge and thereafter reached to the
conclusion that the appeal has no merits. As per Section 107 (2)
of the Central Goods and Services Tax Act, 2017 (for short 'the
CGST Act'), the learned Appellate Authority is under statutory
obligation to state the points for determination and take a
decision thereupon by assigning reasons therefor. The said
statutory obligation is not fulfilled by the learned Appellate
Authority and therefore, the appellate order may be set aside and
the matter may be remitted back before the Appellate Authority.
3. Learned Special Government Pleader for State Tax
supported the impugned order.
4. No other point is pressed.
5. We have heard the parties at length and perused the record.
6. The Appellate Authority has reproduced the major portion of
the order of Adjudicating Authority in the impugned order.
Thereafter, entire consideration of learned Appellate Authority
reads thus:
"From the above observations of the Adjudicating Authority it
can be deduced that while concluding the matter, the Adjudicating
Authority not only referred the provisions contained under the GST
Act and the Rules made thereunder with that of the Notifications
issued, but also took support from the decision rendered by the
Honourable Supreme Court. On the other hand, the appellant
except raising contentions in the grounds of appeal and their
reiteration made by their Authorized Representative, during
the course of personal hearing, failed to substantiate the same
with reference to the legal provisions or the case law holding
the filed on the subject matter.
For the reasons discussion made above, while the action of the
Adjudicating Authority in passing the impugned order is found to
be in order, warranting no interference, the claims made by the
appellant are found to be unsubstantiated. Consequently, the
appeal fails and is accordingly dismissed.
In the end, the appeal is Dismissed."
(Emphasis Supplied)
7. Section 107 (12) of the CGST Act reads thus:
"The order of the Appellate Authority disposing of the
appeal shall be in writing and shall state the points for
determination, the decision thereon and the reasons for
such decision."
8. Learned counsel for the petitioner rightly pointed out that as
per Section 107(12) of the CGST Act, the learned Appellate
Authority is obliged to state the points for determination and take
a decision thereupon by assigning adequate reasons. This
statutory provision, in our opinion, is nothing but codification of
principles of natural justice in a statutory language. The purpose
is clear that application of mind is ensured and any conclusion
arrived at must be founded upon justifiable reasons. If the appeal
of the petitioner is perused, it shows that the petitioner has
devoted almost four pages only on 'Grounds' taken against the
adjudication order dated 26.07.2023. The learned Appellate
Authority merely reproduced the portion of the order impugned
before him and thereafter opined that the appellant 'except raising
contentions in the grounds of appeal reiterating its stand, failed to
substantiate the same'. We wonder how the grounds of appeal
can be ignored by holding that the appellant has merely raised
the contentions in the grounds of appeal. No reasons are
assigned as to why said grounds taken in the appeal were not
found trustworthy by learned Appellate Authority.
9. Thus, the Appellate Authority has failed to satisfy the
statutory mandate ingrained under Section 107 (12) of the CGST
Act and failed to assign reasons which could meet the grounds
taken by the petitioner. The Apex Court emphasized the need of
assigning reasons in administrative, quasi-judicial and judicial
proceedings in the case of Kranti Associates (P) Ltd. v. Masood
Ahmed Khan 1. The relevant portion reads as under:
"12. The necessity of giving reason by a body or authority in
support of its decision came up for consideration before this
Court in several cases. Initially this Court recognised a sort of
demarcation between administrative orders and quasi-judicial
orders but with the passage of time the distinction between the
two got blurred and thinned out and virtually reached a
vanishing point in the judgment of this Court in A.K.
Kraipak v. Union of India [(1969) 2 SCC 262].
13...
14. The expression "speaking order" was first coined by Lord
Chancellor Earl Cairns in a rather strange context. The Lord
Chancellor, while explaining the ambit of the writ of certiorari,
referred to orders with errors on the face of the record and
pointed out that an order with errors on its face, is a speaking
order.
15. This Court always opined that the face of an order passed
by a quasi-judicial authority or even an administrative authority
affecting the rights of parties, must speak. It must not be like
the "inscrutable face of a sphinx".
(2010) 9 SCC 496
47. Summarising the above discussion, this Court holds:
(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 lifeblood
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 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 Harvard Law Review 731-37] .)
(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 Ruiz
Torija v. Spain [(1994) 19 EHRR 553] EHRR, at 562 para 29
and Anya v. University of Oxford [2001 EWCA Civ 405 (CA)] ,
wherein the Court referred to Article 6 of the 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 development
of law, requirement of giving reasons for the decision is of the
essence and is virtually a part of "due process."
10. Since the impugned order of the Appellate Authority is
sketchy and does not deal with the grounds of the appeal, the
same is set aside. The matter is restored to its original file before
the learned Appellate Authority. The petitioner shall appear
before the learned Appellate Authority on 03.03.2025 at 11.30 AM.
The learned Appellate Authority shall rehear the petitioner and
pass a fresh order, in accordance with law.
11. Accordingly, the Writ Petition is disposed of, without
expressing any opinion on the merits of the case. No costs.
Interlocutory applications, if any pending, shall also stand
closed.
_________________________
SUJOY PAUL, ACJ
__________________________
RENUKA YARA, J
20.02.2025
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THE HON'BLE THE ACTING CHIEF JUSTICE SUJOY PAUL
AND
THE HON'BLE SMT JUSTICE RENUKA YARA
(Per the Hon'ble the Acting Chief Justice Sujoy Paul)
20.02.2025
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