Reasoned orders are required when denying sales tax exemption; a non-speaking rejection was quashed and remitted

An order refusing sales tax exemption must disclose reasons when it affects the applicant's entitlement, and a non-speaking order is liable to be set aside. Here, the rejection communication contained no reasons, so the decision was treated as unsustainable for want of a reasoned basis. The proper course was fresh consideration of the review application on merits after hearing the petitioner and issuing a speaking order. The order dated 5 May 1988 was quashed and the matter remitted for reconsideration and a reasoned decision.

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Issues: Whether the order rejecting the petitioner's claim for sales tax exemption was liable to be quashed for being a non-speaking order, and whether fresh consideration was required.

Analysis: The order communicated to the petitioner contained no reasons for rejecting the exemption request. Since the decision affected the petitioner's entitlement to sales tax exemption, reasons were required to be recorded. An order which fails to disclose reasons is vitiated as a non-speaking order and cannot be sustained. The proper course was to require the authority to reconsider the matter on merits after hearing the petitioner and to pass a speaking order.

Conclusion: The order dated 5 May 1988 was quashed, and the Chairman, Noida was directed to reconsider the review application afresh and pass a reasoned order after giving the petitioner an opportunity of hearing.

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