2019 (5) TMI 651 - HC - VAT and Sales Tax

Trade Tax Tribunal's Order Set Aside for Inadequate Reasons

The Court found the Trade Tax Tribunal's order unsustainable due to inadequate reasons and failure to consider the revisionist's case. The order was set ... Recording of reasons - Principles of natural justice - duty to give reasons - Non-speaking order / absence of reasons vitiates adjudication - Right to opportunity of hearing before adjudicatory forum - Remand for fresh decision after affording hearingRecording of reasons - Non-speaking order / absence of reasons vitiates adjudication - Whether the order of the Trade Tax Tribunal dated 07.11.2007 is sustainable despite not recording adequate reasons for setting aside the order of the first appellate authority. - HELD THAT: - The Tribunal set aside the order of the first appellate authority without articulating any reasoned infirmity in that order and without any deliberation on legal provisions; it confined itself to reversing the first appellate order without recording the basis for doing so. The Court reiterated the settled principle that judicial and quasi-judicial orders must be supported by reasons sufficient to demonstrate application of mind and to make the remedy of appeal meaningful. Absence of reasons substitutes subjectivity for objectivity and renders the order indefensible on appeal. Given the Tribunal's failure to explain why the first appellate order was erroneous, its order is a non-speaking order and cannot be sustained. [Paras 9, 10, 11, 14, 19]The order of the Trade Tax Tribunal dated 07.11.2007 is set aside for non-recording of reasons and being a non-speaking order.Right to opportunity of hearing before adjudicatory forum - Remand for fresh decision after affording hearing - Remedy and course to be adopted after setting aside the Tribunal's order. - HELD THAT: - Having set aside the Tribunal's order for lack of reasons, the matter is remanded to the Trade Tax Tribunal for fresh adjudication. The Tribunal is directed to decide the second appeal afresh in accordance with law after affording the revisionist an opportunity of hearing. The Court imposed a time limit to ensure expedition, directing that the Tribunal decide the matter within six months from production of a certified copy of this order. [Paras 20, 21, 22]Matter remanded to the Trade Tax Tribunal for fresh decision after affording opportunity of hearing; Tribunal to decide the matter within six months from production of certified copy of this order.Final Conclusion: The Trade Tax Tribunal's order dated 07.11.2007 is set aside for want of reasons and the matter is remanded for fresh decision after affording the revisionist an opportunity of hearing; the Tribunal is directed to decide the matter within six months from production of a certified copy of this order. Issues Involved:1. Legality of ex parte assessment proceedings.2. Validity of the service of notice.3. Adequacy of reasons provided by the Trade Tax Tribunal in its judgment.4. Principles of natural justice and requirement of recording reasons in judicial orders.Issue-wise Detailed Analysis:1. Legality of ex parte assessment proceedings:The revisionist contended that the assessment proceedings were conducted ex parte, which was contrary to statutory provisions. The survey conducted on 09.01.2002 led to an ex parte assessment order dated 15.02.2003, raising a demand of Rs. 48,000/- for the assessment year 2000-01 without providing the revisionist an opportunity to be heard. Despite moving an application under Section 30, the revisionist did not appear before the assessing authority, leading to the finalization of the assessment ex parte on 03.11.2003 based solely on the survey report.2. Validity of the service of notice:The revisionist argued that no person named Shri Sabir was employed by him, disputing the claim that the notice was duly served. The first appellate authority directed the Assessing Officer to provide the diary found during the survey, but no records were produced. The first appeal was allowed on 31.05.2005. However, the Trade Tax Tribunal, in its order dated 07.11.2007, held that the service of notice was sufficient as it was served upon Shri Sabir, an alleged employee of the revisionist. The Tribunal decided the second appeal in favor of the department without the revisionist's appearance.3. Adequacy of reasons provided by the Trade Tax Tribunal in its judgment:The Tribunal’s order dated 07.11.2007 was criticized for lacking adequate reasons. The Tribunal failed to consider the merits of the revisionist's case and did not record any reasons for setting aside the first appellate authority's order. The Tribunal did not deliberate on or consider any legal provisions, rendering its order unsustainable. The Court emphasized that the Tribunal must provide adequate reasons for its findings, indicating proper handling of the case and due application of mind.4. Principles of natural justice and requirement of recording reasons in judicial orders:The Court highlighted the principle that judicial orders must be supported by reasons, as established by the Hon’ble Supreme Court in multiple cases. Reasons are essential for transparency, fairness, and meaningful appellate review. The absence of reasons in the Tribunal’s order violated the principles of natural justice, making the order indefensible. The Court cited several Supreme Court judgments underscoring the necessity of recording reasons to ensure justice and provide clarity for further appeals.Conclusion:The Court found that the Trade Tax Tribunal’s order dated 07.11.2007 was unsustainable due to the lack of recorded reasons and failure to consider the revisionist's case on merits. The order was set aside, and the matter was remanded to the Trade Tax Tribunal for a fresh decision in accordance with the law, after affording an opportunity of hearing to the revisionist. The Tribunal was directed to decide the revision within six months from the date a certified copy of the order is produced. The revision was allowed with these directions.