Reasoned adjudication under VAT requires consideration of objections and recorded reasons; unaddressed replies vitiate penalty orders.

An adjudicatory order under the VAT regime must consider the dealer's objections to the show-cause notice and record reasons if the explanation is rejected; a bare assertion that the contentions were not considered is insufficient. Here, the assessment orders levying penal interest and penalty did not deal with the objections or the reply and contained no reasoned rejection, so the orders were held unsustainable. The HC set them aside and remanded the matter for fresh consideration after granting a personal hearing and passing a reasoned order.

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Issues: Whether the orders levying penal interest and penalty could be sustained when the dealer's objections and reply to the show-cause notice were not considered and no reasons were recorded for rejecting them.

Analysis: The impugned orders merely stated that the dealer's contentions were not considered, without discussing the objections filed to the notice or the subsequent reply. The governing procedure required the assessing authority to consider the explanation and, if it was not acceptable, to record reasons. An order passed without dealing with the objections and without assigning reasons does not satisfy the requirement of a fair and reasoned adjudication.

Conclusion: The levy of penal interest and penalty could not be sustained. The orders were set aside and the matter was remanded for fresh consideration after granting personal hearing and passing a reasoned order.

Ratio Decidendi: An adjudicatory order under the VAT regime must consider the dealer's objections and record reasons for rejecting them; failure to do so vitiates the order and warrants remand.

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