TaxTMI 
TaxTMI 
2025 (5) TMI 1533
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....e Revenue against the Order-in-Original dated 26.05.2023 (Annexure-2) of the Assistant Commissioner of Central Tax, GST & Central Excise Commissionerate, Rourkela-I Division-opposite party No. 4 dropping the proceeding under Section 73 of the Finance Act, 1994, this writ petition has been filed craving to invoke extraordinary jurisdiction under Articles 226 and 227 of the Constitution of India with the following prayer(s): "Therefore, in the facts and circumstances stated above, it is most humbly prayed that this Hon'ble Court may be pleased to; (i) issue appropriate writ, order or direction to set aside/quashed the order dated 24.02.2025 passed by opposite party No. 1 at Annexure-5 and restore the appeal to its Original Number; (ii) issue appropriate declaration to the effect that the impugned Order-in-Appeal dated 24.02.2025 is not sustainable as arises out of an invalidated Order-in-Original being the Order-in-Original barred by limitation under Section 73 (4B) of the Finance Act, 1994; (iii) issue appropriate declaration to the effect that the services provided by the petitioner qualifies to be 'export service' under Rule 6A of the Service Ta....
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....d not accompany memorandum of appeal, a petition seeking copy thereof was filed. On 15.10.2024 copy of appeal petition was served on the petitioner. 2.4. Another notice dated 29.10.2024 fixing date of personal hearing on 12.11.2024. After service of copy of appeal petition on the petitioner this being the first date of deferred hearing, a petition for adjournment was moved, considering which the prayer was allowed. 2.5. Further notice dated 26.11.2024 fixing date of hearing via video conferencing mode on 02.12.2024 was served on 30.11.2024. On account of short notice, the advocate for the petitioner sought for accommodation on 02.12.2024. 2.6. The appeal stood disposed of by the Commissioner (Appeals), Bhubaneswar vide Order dated 24.02.2025, though no date of hearing in consideration of petition dated 30.11.2024 was given. 2.7. Aggrieved thereby, the petitioner has filed this instant writ petition. Hearing: 3. This matter came up before this Court under the heading "Fresh Admission". 3.1. Since issues of non-assignment reason and violation of principles of natural justice are involved, in absence of factual dispute, counsel for both the sides consented for dis....
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....sidered prayer for adjournments on 27.09.2024, 15.10.2024 and 12.11.2024 fixed the hearing via video conferencing mode on 02.12.2024. Since the counsel for the petitioner did not choose to appear before him, he had no other option but to proceed with the matter and dispose of the appeal in absence of petitioner/counsel representing it. 5.1. Since no response/explanation has been proffered by the petitioner with reference to grounds contained in the appeal petition, the Appellate Authority has allowed the appeal based on the material on record with reference to Review Order. Since the petitioner had the occasion to have the said document, it could not be contended that proper opportunity was not afforded to him for presenting the matter. Therefore, he fervently prayed for dismissal of the writ petition in view of availability of alternative remedy. Discussions and analysis: 6. Since principles of natural justice and assignment of reason are the issues raised by the petitioner, this Court notwithstanding availability of alternative remedy entertained this writ petition. In this respect a Division Bench of this Court in the case of Tribal Development Co-operative Corporation ....
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....ficer subordinate to him to apply to the Commissioner of Central Excise (Appeals) for the determination of such points arising out of the decision or order as may be specified by the Commissioner of Central Excise in his order. (2) Every order under sub-section(1) shall be made within a period of three months from the date of communication of the decision or order of the adjudicating authority. (3) Where in pursuance of an order under sub-section (1), the adjudicating authority or any other officer authorised in this behalf makes an application to the Commissioner of Central Excise (Appeals) within a period of one month from the date of communication of the order under sub-section (1) to the adjudicating authority, such application shall be heard by the Commissioner of Central Excise (Appeals), as if such application were an appeal made against the decision or order of the adjudicating authority and the provisions of this Chapter regarding appeals shall apply to such application. Explanation.- For the removal of doubts, it is hereby declared that any order passed by an adjudicating officer subordinate to the Commissioner of Central Excise immedia....
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....king orders under the Central Excise Act, 1944." 7.1. Regard being had to statutory provisions as culled out above, it is the Appellate Authority who is invested with "discretion" to consider merit of each petition for adjournment. A public body endowed with a statutory discretion may legitimately adopt general rules or principles or policy to guide itself as to the manner of exercising its own discretion in individual cases, provided that such rules or principles are legally relevant to the exercise of its powers, consistent with the purpose of the enabling legislation and not arbitrary or capricious. Nevertheless, it must not disable itself from exercising a genuine discretion in a particular case directly involving individual interests; hence it must be prepared to consider making an exception to the general rule if the circumstances of the case warrant special treatment. The amplitude of a discretionary power may be so wide that the competent authority may be impliedly entitled to adopt a fixed rule never to exercise its discretion in favour of a particular class of person; and such a power may be expressly conferred by statute. [See, Halsbury, Vol. I, 4th Edition, para 33, ....
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....4.02.2025 an opportunity could have been granted exercising the power under Section 84 and Section 85 of the Finance Act, 1994 read with Section 35 of the Central Excise Act, 1944. Scrutiny of documents enclosed to the present writ petition reveals that on receipt of notice bearing scheduled date of personal hearing on 02.12.2024, the petitioner had filed a petition dated 30.11.2024 seeking consideration of deferment of date of hearing as the counsel for the petitioner was otherwise preoccupied and with short notice it was difficult on his part to collect all the documents and present the matter on behalf of the petitioner. 7.6. It appears that petition dated 30.11.2024, was received in the Office of the Commissioner (Appeals), GST, Central Excise & Customs, Bhubaneswar, but nothing is emanating on perusal of the Appellate Order that the Appellate Authority has considered the same and rejected such prayer for deferment of date of hearing in order to proceed further to close the appeal for delivery of order. 7.7. Conjoint reading of sub-section (3) of Section 84 and sub-section (5) of Section 85 of the Finance Act, 1994 read with Section 35(1A) of the Central Excise Act, 1944,....
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.... not disposed of the petition for adjournment of hearing in consonance with the manner projected in Section 84 (3) and Section 85(5) of the Finance Act, 1994 read with Section 35(1A) of the Central Excise Act, 1944, particularly when the statute permits the Appellate Authority to exercise his discretion to grant reasonable opportunity, this Court cannot countenance the Appellate Order, but to set it aside for disposal of appeal de novo after affording appropriate reasonable opportunity to the parties. 8. This Court is also called upon to consider another aspect other than audi alteram partem. Another facet of principles of natural justice is sought to be pressed into service is "right to reason". 8.1. The Appellate Order is bereft of reason. Non-speaking and terse order deserves to be interfered with by the writ Court. In absence of discussion on merit on consideration of each ground pressed in the appeal, the order in appeal is liable to be set aside. 8.2. After making mere statement that sufficient number of opportunities for appearing before the Appellate Authority being given, the petitioner did not submit its counter and in absence of response he proceeded to dispose ....
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....me deserves to be remitted to the Appellate Authority for passing a reasoned and speaking order dealing with the grounds raised in the Appeal challenging the order passed by the Assessing Authority. 8.6. The Commissioner of Central Excise (Appeals) is supposed to hear and determine the appeal and pass such orders as he thinks fit. In hearing the appeal and making order, the Appellate Authority is empowered to exercise the same powers and follow the same procedure as he exercises and follows in hearing the appeals and making orders under the Central Excise Act, 1944. Thus, the Appellate Authority is required to address each of the issue/ground set out in the appeal petition on merit of the matter, even in the absence of either of the parties. 8.7. In East Coast Railway Vrs. Mahadev Appa Rao, (2010) 7 SCR 908, the Hon'ble Supreme Court in very categorical terms has held that arbitrariness in making of an order by an authority can manifest itself in different forms. Every order passed by a public authority must disclose due and proper application of mind by the persons making the order. Application of mind is best demonstrated by disclosure of mind by the authority making the or....
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....udging the validity of the decision. Right to reason is an indispensable part of a sound judicial system; reasons at least sufficient to indicate an application of mind to the matter before court. Another rationale is that the affected party can know why the decision has gone against him. One of the salutary requirements of natural justice is spelling out reasons for the order made; in other words, a speaking-out. The "inscrutable face of the sphinx" is ordinarily incongruous with a judicial or quasi-judicial performance." 8.9. In Broom's Legal Maxims (1939 Edition, Page 97) there can be found a useful principle, Cessante Ratione Legis Cessat Ipsa Lex, that is to say, 'Reason is the soul of the law, and when the reason of any particular law ceases, so does the law itself'. 8.10. In Kranti Associates (P) Ltd. Vrs. Masood Ahmed Khan, (2010) 9 SCC 496 the legal position has been summarised as follows See also, Nareshbhai Bhagubhai Vrs. Union of India, (2019) 15 SCC 1.: "12. The necessity of giving reason by a body or authority in support of its decision came up for consideration before this Court in several cases. Initially this Court recognised a sort of demar....
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....asons in support of decisions must be cogent, clear and succinct. A pretence of reasons or 'rubber-stamp reasons' is not to be equated with a valid decision-making process. (m) It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decision-making not only makes the judges and decision-makers less prone to errors but also makes them subject to broader scrutiny. (See David Shapiro in Defence of Judicial Candor, (1987) 100 Harvard Law Review 731-37). (n) Since the requirement to record reasons emanates from the broad doctrine of fairness in decision-making, the said requirement is now virtually a component of human rights and was considered part of Strasbourg Jurisprudence. See Ruiz Torija Vrs. Spain, (1994) 19 EHRR 553 EHRR, at 562 para 29 and Anya Vrs. University of Oxford, 2001 EWCA Civ 405 (CA), wherein the Court referred to Article 6 of the European Convention of Human Rights which requires, 'adequate and intelligent reasons must be given for judicial decisions'. (o) In all common law jurisdictions judgments play a vital role in setting up precedents for the future. Therefore, for developmen....
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....ustice which governs exercise of power by administrative authorities. Except in cases where the requirement has been dispensed with expressly or by necessary implication, an administrative authority is required to record reasons for its decision. 12. In Menaka Gandhi Vrs. Union of India, AIR 1978 SC 597 the Apex Court observed that the reasons, if disclosed, being open to judicial scrutiny for ascertaining their nexus with the order, the refusal to disclose the reasons would equally be open to the scrutiny of the court; or else, the wholesome power of a dispassionate judicial examination of executive orders could, with impunity, be set at naught by an obdurate determination to suppress the reasons." 8.12. It is stated by Hon'ble Supreme Court in State Bank of India Vrs. Ajay Kumar Sood, 2022 SCC OnLine SC 1067 that individual judges can indeed have different ways of writing judgments and continue to have variations in their styles of expression. The expression of a judge/ authority is an unfolding of the recesses of the mind. However, while recesses of the mind may be inscrutable, the reasoning in judgment cannot be. While judges/ authorities may have their own style of....
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....rts would be failing to perform its duty if relief is refused without adequate reasons. It is further observed that in this case, the High Court in exercise of powers under Article 226 of the Constitution of India was required to have independently considered the legality and validity of the order passed by the Tribunal which was under challenge before it. Neither any submission on merits is recorded nor is there any discussion on the merits of the matter on the order passed by the Tribunal. There is no application of mind at all by the High Court on merits of the order passed by the Tribunal. It can be seen that the High Court has failed to exercise its jurisdiction vested in it while exercising the powers under Articles 226/227 of the Constitution of India. 9. While emphasising the necessity to pass a reasoned order, in Central Board of Trustees Vrs. Indore Composite (P) Ltd., (2018) 8 SCC 443, it was observed and held by this Court that the courts need to pass a reasoned order in every case which must contain the narration of the bare facts of the case of the parties to the lis, the issues arising in the case, the submissions urged by the parties, the legal principles a....
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....o. of India Ltd. Vrs. Union of India, (1976) 2 SCC 981 = AIR 1976 SC 1785 the Supreme Court held as under: (SCC pp. 986-87, para 6) '6. ... If courts of law are to be replaced by administrative authorities and tribunals, as indeed, in some kinds of cases, with the proliferation of administrative law, they may have to be so replaced, it is essential that administrative authorities and tribunals should accord fair and proper hearing to the persons sought to be affected by their orders and give sufficiently clear and explicit reasons in support of the orders made by them. Then alone administrative authorities and tribunals exercising quasi-judicial function will be able to justify their existence and carry credibility with the people by inspiring confidence in the adjudicatory process. The rule requiring reasons to be given in support of an order is, like the principle of audi alteram partem, a basic principle of natural justice which must inform every quasi-judicial process and this rule must be observed in its proper spirit and mere pretence of compliance with it would not satisfy the requirement of law.' 16. In McDermott International Inc. Vrs. Burn Standard Co. L....
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....ended to administrative actions on the premise that it applies with greater rigour to the judgments of the courts. 18. In State of Maharashtra Vrs. Vithal Rao Pritirao Chawan, (1981) 4 SCC 129 while remanding the matter to the High Court for examination of certain issues raised, this Court observed: (SCC p. 130, para 2) '2. ... It would be for the benefit of this Court that a speaking judgment is given.' *** 21. The principles stated by this Court, as noticed supra, have been reiterated with approval by a Bench of this Court in a very recent judgment, in State of Uttaranchal Vrs. Sunil Kumar Singh Negi, (2008) 11 SCC 205, where the Court noticed the order of the High Court which is reproduced hereunder: '8. ... 'I have perused the order dated 27-5-2005 passed by Respondent 2 and I do not find any illegality in the order so as to interfere under Articles 226/227 of the Constitution of India. The writ petition lacks merit and is liable to be dismissed.' ' and the Court concluded as under: (Sunil Kumar Singh Negi case, (2008) 11 SCC 205: '9. In view of the specific stand taken by the Department in the affidavit which we ha....
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.... they are also a valuable discipline for the tribunal itself.' *** 24. Reason is the very life of law. When the reason of a law once ceases, the law itself generally ceases (Wharton's Law Lexicon). Such is the significance of reasoning in any rule of law. Giving reasons furthers the cause of justice as well as avoids uncertainty. As a matter of fact it helps in the observance of law of precedent. Absence of reasons on the contrary essentially introduces an element of uncertainty, dissatisfaction and give entirely different dimensions to the questions of law raised before the higher/appellate courts. In our view, the court should provide its own grounds and reasons for rejecting claim/prayer of a party whether at the very threshold i.e. at admission stage or after regular hearing, howsoever concise they may be. 25. We would reiterate the principle that when reasons are announced and can be weighed, the public can have assurance that process of correction is in place and working. It is the requirement of law that correction process of judgments should not only appear to be implemented but also seem to have been properly implemented. Reasons for an order....
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....igh Court and in the argument addressed during the time of hearing of the revision petition. 11. With some regret, we are constrained to notice that the cryptic orders like the above, have not only been passed in the present appeals, but identical orders had even been passed by the High Court in large number of cases from which the appeals have been preferred before this Court. Identical orders, though in different revision petitions dealing with different facts, parties and questions of law, running into 4 lines, like the present one, have been passed, even without variation of a coma or a full stop. It also needs to be noticed that the grounds raised by the Department before us cannot be said to be frivolous or untenable which required discussion by the High Court. The orders, besides being cryptic, suffer from basic infirmity of non-application of mind and non-speaking orders in law. This ground need not detain us any further as even in other cases where identical orders were passed, this Court had the occasion to consider the same grounds at some length. Reference, in this regard, can be made to the judgment of the date, the Bench, in the case of Assistant Commissioner....
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....e of the issues. As such it is the duty cast upon the courts to adjudicate on all the issues and pronounce the judgment on all the issues rather than adopting a shortcut approach and pronouncing the judgment on only one issue. By such a practice, it would increase the burden on the appellate court and in many cases if the decision on the issue decided is found to be erroneous and on other issues there is no adjudication and no findings recorded by the court, the appellate court will have no option but to remand the matter for its fresh decision. Therefore, to avoid such an eventuality, the courts have to adjudicate on all the issues raised in a case and render findings and the judgment on all the issues involved." 8.19. Glance at paragraph 4 and paragraph 5 of the Appellate Order in question, as extracted herein above, does not transpire that the Appellate Authority has applied his mind to the grounds of appeal of the Revenue vis-à-vis contents of Review Order qua the Order-in-Original dropping the proceeding initiated under Section 73 of the Finance Act, 1994. Conclusion: 9. With the enunciation of principles of audi alteram partem with reference to prayers made fo....