Reasoned tax remission decisions under Gujarat sales tax law are required before rejection of an application.

A discretionary remission of tax under section 55(2) of the Gujarat Sales Tax Act, read with rule 49, must be decided on objective material and reasoned consideration. The rule requires the applicant to disclose the calamity, loss sustained, relief sought and reasons for the request, and the quasi-judicial nature of the power attracts the settled requirement that reasons be recorded unless excluded by statute. The availability of an appeal further supports disclosure of reasons to enable effective challenge and to guard against arbitrariness. The Commissioner was therefore required to give reasons before rejecting a remission application.

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Issues: Whether, on a reference under section 69 of the Gujarat Sales Tax Act, 1969, the Sales Tax Commissioner was required to record reasons while disposing of an application for remission of tax under section 55(2) read with rule 49 of the Gujarat Sales Tax Rules, 1970.

Analysis: Section 55(2) confers discretionary power on the Commissioner to remit tax, but that power is exercised subject to the circumstances and conditions prescribed by rule 49. The rule requires the applicant to disclose the details of the calamity, the loss sustained, the relief sought and the reasons for the request, showing that the decision on remission must be made on objective material and reasoned consideration. The order is also appealable under the statutory scheme as it then stood, which reinforces the need to disclose reasons so that the aggrieved party can effectively challenge the decision. The power is quasi-judicial in nature, and settled principles require reasons to be recorded in such decisions unless the statute excludes that requirement expressly or by necessary implication. Recording reasons also prevents arbitrariness and promotes fairness and transparency in decision-making.

Conclusion: The Commissioner was required to give reasons before rejecting an application under section 55(2) read with rule 49, and the question was answered in the negative, in favour of the assessees and against the Revenue.

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