Tribunal order set aside for failing to provide reasons when dismissing recall application violating natural justice

The HC set aside a tribunal order dated 08.12.2016 for violating natural justice principles. The tribunal failed to provide reasons when dismissing the revisionist's recall application, treating it merely as a rectification request without considering the explanation for non-appearance. The court held that absence of reasoning renders judicial orders liable to interference, as reasons are essential for demonstrating application of mind. The tribunal committed manifest error by not complying with statutory provisions requiring reasoned decisions. The revision was allowed in favor of the assessee.

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Issues Involved:

1. Violation of principles of natural justice.
2. Incorrect application of inter-state sale exemption.
3. Imposition of penalty.
4. Non-reasoned and non-speaking orders.

Summary:

1. Violation of Principles of Natural Justice:
The assessee challenged the common judgment and order dated 08.12.2016 passed by the Commercial Tax Tribunal, Lucknow, which dismissed the second appeals due to the non-presence of the assessee or his counsel. The Tribunal's order was argued to be non-reasoned and passed without affording an opportunity of hearing to the assessee. The Court noted that Rule 63 of the Uttar Pradesh Value Added Tax Rules, 2008 mandates that the judgment in appeal shall be in writing, stating the points of determination, the decision thereon, and the reasons for such decision. The Tribunal failed to comply with these requirements, rendering the order unsustainable.

2. Incorrect Application of Inter-State Sale Exemption:
The assessee contended that the sales in question were inter-state sales, exempt from tax under Section 6(2) of the Central Sales Tax Act, 1956. The Deputy Commissioner of Commercial Taxes, Lucknow, denied this claim, which was upheld by the Additional Commissioner and subsequently by the Tribunal. The Court found that the Tribunal did not adequately address the assessee's arguments or provide sufficient reasoning for its decision.

3. Imposition of Penalty:
The Tribunal upheld the penalty imposed on the assessee for the years 2008-2009 and 2010-2011. The assessee argued that the penalty was unjustified as there was no intention to evade tax, and mere blank columns in Form 38 should not lead to penalty imposition. The Court noted that the Tribunal's order lacked reasoning and failed to consider the assessee's explanations.

4. Non-Reasoned and Non-Speaking Orders:
The Court emphasized that an order without valid reasons cannot be sustained, as it violates the principles of natural justice. The Tribunal's order dated 08.12.2016 was found to be non-reasoned and cursory. The Court cited several Supreme Court judgments highlighting the necessity of recording reasons in judicial orders.

Conclusion:
The impugned order dated 08.12.2016, along with the consequential orders dated 04.11.2022, were set aside. The matter was remanded to the Tribunal for fresh consideration, with directions to provide a reasoned order in compliance with Rule 63 of the Rules, 2008, within three months. The Court also instructed the parties not to seek unnecessary adjournments. The revisions were allowed in these terms.

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