SELECT JUDICIAL PRONOUNCEMENTS ON REASONED ORDER/SPEAKING ORDER

Any adjudication process ends with an issuance of an order or final decision communicated in the form of adjudication order or order- in-original. As per settled principles of adjudication and jurisprudence, such orders should be complete in all respects, comprehensive and self explanatory and more particularly must be reasoned or speaking orders. Such reasons should form the back-bone of the order and must lead the final outcome of the order. Non-speaking or unreasoned orders are liable to be set aside.

• In ICICI LOMBARD GENERAL INSURANCE CO. LTD Versus  UNION OF INDIA & ORS. - 2025 (1) TMI 124 - DELHI HIGH COURT,where impugned order under section 73 was passed merely mentioning that reply filed was ‘not comprehensible, conceivable and not perspicuous’, approach of respondent authority exhibited an abject non-application of mind; impugned order being unreasoned was to be set aside.

• In XEROX INDIA LIMITED Versus ASSISTANT COMMISSIONER, WARD 208 (ZONE -11) DGST AND ANR - 2024 (12) TMI 1283 - DELHI HIGH COURT, where impugned order under section 73 of CGST Act, 2017 passed mentioning merely that reply filed was not comprehensible, conceivable, not perspicuous and is ambiguous, court held that the approach of respondent authority exhibited an abject non-application of mind and that impugned order being an unreasoned order was to be set aside.

• In Shree Shyam Granites and Marbles Versus The Assistant Commissioner (ST) (FAC), Hosur (South) - III Circle, Hosur - 2023 (2) TMI 652 - MADRAS HIGH COURT, where no reasons were given by the Department for rejecting petitioner’s objection raised in replies and personal hearing was afforded before receipt of reply, it was held that principles of natural justice were violated when no reasons were given by revenue for rejecting assessees objections raised in replies and personal hearing was afforded to assessee only before replies were sent by petitioner; adjudication order required fresh consideration.

• In M.P. COMMODITIES PVT. LTD. Versus STATE OF GUJARAT - 2022 (3) TMI 1154 - GUJARAT HIGH COURT it was held that where department had passed non-speaking order instead of reasoned speaking order, matter was to be readjudicated. Department should ensure that a reasoned order was passed dealing with each and every submission raised by writ applicants.

• In Ram Prakash Chauhan Versus Commissioner Of Delhi (Goods And Service Tax) & Anr. - 2023 (1) TMI 983 - DELHI HIGH COURT, where the SCN and detention order lacked an explanation of the reason for detaining the goods, raising the tax and penalty liability, and simply stated that the documents submitted are found to be defective, with no specific flaw mentioned. The court set aside both the show cause notice and the demand order imposing tax and penalty and remanded the case to the relevant GST officials to be decided afresh.

• In COMMISSIONER OF CUSTOMS (IMPORTS), CHENNAI Versus PENSHIBAO WANG P. LTD. - 2011 (6) TMI 704 - Madras High Court, it was held that when statutory appeal is filed before CESTAT, it is expected to consider the factual matrix in an objective manner as it is the last forum of facts. In the instant case, Cestat was dealing with a dispute involving the Department and an importer. It rejected the second appeal filed by the Department on the ground that neither in the grounds of appeal nor in the arguments made by the Department, additional points were not raised so as to take a different view. Passing of such a non-speaking order was not justified, as not giving of reasons which weighed with CESTAT one way or another impaired the ability of the higher forums to decide the matter effectively. Following extracts are relevant in this context—

'In KRANTI ASSOCIATES PVT. LTD. Versus MASOOD AHMED KHAN - 2010 (9) TMI 886 - Supreme Court, Supreme Court observed that the face of an order passed by a quasi-judicial authority or even an administrative authority affecting the rights of the parties must speak. The Supreme Court, after considering the earlier decisions on the point, summarised the position thus:

51. Summarizing 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 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 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  v 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 development of law, requirement of giving reasons for the decision is of the essence and is virtually a part of Due Process.'