Tribunal's refusal to refer proposed tax law questions without reasons-orders set aside for breaching natural justice, matters remanded.

The dominant issue was whether the Tribunal's order refusing or omitting to refer multiple proposed questions of law under the taxing statute was vitiated for want of reasons. The HC held that a judicial order must be a speaking order; non-recording of reasons amounts to denial of justice and breaches natural justice, as reasons demonstrate application of mind and enable effective challenge. Since the Tribunal failed to record reasons on seven of eight questions raised, the HC set aside the impugned orders and remanded all matters to the Tribunal to decide the reference applications afresh on merits in accordance with law, including deciding whether any proposed questions are substantial questions of law.

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Issues Involved:
1. Whether personal consumption of motor spirit and diesel oil by the petrol dealer falls within the definition of "sale" under Section 2(h) of the J&K Motor Spirit and Diesel Oil (Taxation of Sales) Act, 2005.
2. Whether the Tribunal was justified in holding that the assessment completed on a yearly basis was not liable to be quashed.
3. Whether the Tribunal was justified in its interpretation of "sale" affecting the results of the appeal.
4. Whether evaporation losses should be considered as deemed sales.
5. Whether Rule 18-A of the Rules of 2005 is beyond the rule-making power granted by the Act of 2005.
6. Whether the Tribunal was justified in upholding the order of the Assessing Authority in enhancing the sale value based on rates of other companies.
7. Whether the Tribunal was justified in demanding additional tax on downgraded HSD to LDO.
8. Whether the Tribunal could confirm the order demanding interest without a speaking order.

Summary of Judgment:

Issue 1: Personal Consumption as "Sale"
The Tribunal referred a question of law to the Court regarding whether personal consumption of motor spirit and diesel oil by the petrol dealer falls within the definition of "sale" under Section 2(h) of the J&K Motor Spirit and Diesel Oil (Taxation of Sales) Act, 2005. The Court framed the question of law and noted an error in the previous order, clarifying it was to be read in STR No. 2/2009 and STR No. 3/2009.

Issue 2: Yearly vs. Monthly Assessment
The applicants questioned whether the Tribunal was justified in holding that the assessment completed on a yearly basis was not liable to be quashed. The Tribunal failed to address this question in its order.

Issue 3: Interpretation of "Sale"
The applicants argued that the Tribunal's interpretation of "sale" affected the results of the appeal, particularly concerning the addition of evaporated diesel oil and petrol as sales liable to tax. The Tribunal did not provide reasons for its decision on this issue.

Issue 4: Evaporation Losses as Deemed Sales
The applicants contended that evaporation losses should not be considered as deemed sales since there was no transfer of property in goods. The Tribunal did not address this question in its order.

Issue 5: Rule 18-A's Validity
The applicants challenged the validity of Rule 18-A of the Rules of 2005, arguing it was beyond the rule-making power granted by the Act of 2005. The Tribunal did not consider this question.

Issue 6: Enhancement of Sale Value
The applicants questioned the Tribunal's justification in upholding the Assessing Authority's order to enhance the sale value based on the rates of other companies. The Tribunal did not address this issue.

Issue 7: Additional Tax on Downgraded HSD
The applicants contended that the Tribunal was unjustified in demanding additional tax on downgraded HSD to LDO at a price lower than other companies when no such tax was collected. The Tribunal did not provide reasons for its decision on this issue.

Issue 8: Interest Without Speaking Order
The applicants argued that the Tribunal confirmed the order demanding interest without passing a speaking order. The Tribunal did not address this question.

Legal Analysis and Discussion:
The Court emphasized that failure to provide reasons amounts to denial of justice. Reasons are essential for transparency and allow higher courts to review decisions. The Tribunal's orders lacked reasoning for seven out of the eight questions raised, leading to potential prejudice against the applicants and hampering the administration of justice.

Conclusion:
The Court remanded the matters back to the Tribunal to decide and dispose of the reference applications afresh, in accordance with law and on their merits. The Tribunal is directed to provide a speaking and reasoned order, addressing all questions raised by the applicants. The orders impugned in the reference applications passed by the Tribunal are set aside.

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