High Court · 2025

Judgment

5. The Appellate Joint Commissioner of State Tax, Hyderabad Rural Division' Hvderabad. itEX.[ii"t commissioner of state Tax, Mehdipatnam-t circte, charminar, Hyderabad. irlJ-srt" of Telangana, Rep. by its Principal Secretary, Revenue (CT) Department, Telangana Secretariat, Hyderabad' in"5 t"ili.';r i;oill-n"p. bv-iii s<icr6tarv, Ministry of Finance, North Block, New Delhi - 110 001. ri" c"iiii"r eoard ot Indirect Taxes ahd customs, Rep. by its chairman, rrliinirw'oi Fin"nce, Department of Revenue, North Block, central secretariat, New Di-,lhi - 100 001. ...RESPONDENTS

Petition under Article 226 ol the constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue Writ of Mandamus or any other appropriate Writ or Order or Direction declaring. (1) the action of the Pt Respondent in ncit considering the contentions of the Petitioner raised in the Grounds of Appeal and passing Appeal Orders, dated 28.1 1.2024 in a summary manner, without even signature of the 1st Respondent, as arbitrary, contrary to the provisions of the CGST/SGST Act 20lTandnotvalidintheeyeoflaw,inviolationofPrinciplesofNaturalJustice and Rule of Law, (2) the action of the 2nd Respondent in issuing Show Cause Notice,dated14.11.2021andpassingtheorder,dated23.04.2024,theSummary of the order in Form csr DRC-07, dated 23.04.2024 and the proceedings, dated 25'o4'2024, without any signature either physicaily or crigitaily, is not varid in the eye of law, (3) the action of the 2nd Respondent in not issuing Form DRC_O1A before passing the Orders, as contemplated under Rule 142(,lA) of the CGST/SGST Act 201r, amounts to invarid, (4) the action of the 2nd Respondent in not generating verifiabre DrN in the Notices and orders, is not varid in the eye of law, and consequenry set aside the Appear order, dated 2g.11.2024 passed by the '1St Respondent, and the Order, dated 23.04.2024, the Summary of the Order in Form GST DRC-07, dated 23.04.2024 and the proceedings, dated Nil passed by the 2nd Respondent, for the tax period 2018-19 under the CGST/SGST Acts 2017, as nult and void lA NO: 1 oF 2025 Petition under section 151 cpc praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to suspend the operation of the Appear order, dated 2g.11.2024 passed by the 1"t Respondent, and the order, dated 23.04.2024, the summary of the order in Form GST DRC-07, dated 23.04.2024 and the proceedings, dated Nir passed by the 2nd Respondent, for the tax period 2o1l-1g under the CGST/SGST Acts 2017, pending disposar of the above writ petition, as otherwise, the petitioner wifi be put to severe loss and hardship. Counsel for the petitioner: SRl. SHAIK JEELANI BASHA Counsel for the Respondent Nos. 1to3: SRI SWAROOP OORILLA, Special Govt pleader for State Tax Counsel for the Respondent No.4: SRI B. MUKHERJEE RE SRI GADI PRAVEEN KUMAR, DY. SOLICITOR GENERAL OF INDIA Counsel for the Respondent No.S: Ms. PRAVALIKA REp SRI DOMINIC FERNDNADES, SENIOR SC FOR CBIC The Court made the following: ORDER l THE HON'BLE THE ACTING CHIEF JUSTICE SUJOY PAUL AND THE HON'BLE SMT. JUSTICE RENUKA YARA WRIT PETITION No.5147 of 2o25 ORDER (Per the Hon'ble the Ading Chief Justice Sujog Paul); Sri Shaik Jeelani Basha, learned counsel for the petitioner; Sri Swaroop Oorilla, learned Special Government Pleader for State Tax, for respondent Nos.l to 3; Sri B. Mukherjee, learned counsel representing Sri Gadi Praveen Kumar, learned Deputy Solicitor General of India, for respondent No.4 ald Ms. Pravalika, learned counsel representing Sri Dominic Fernandes, learned Senior Standing Counsel for CBIC, for respondent No.5. 2 With the consent, finally heard.

3. The singular attack to the impugned appellate order dated 28.1 1.2024 is on the ground that grounds raised in the appeal (page No.73) have not been considered by the appellate authority. No reasons are assigned as to why grounds taken in the appeal memo did not hnd favour with the appellate authority. Thus, the impugned appellate order may be set aside and the appellate authority may be directed to rehear the petitioner and pass a fresh order in accordance u'ith law. n / 2 4 5 The other side has no objection to this innocuous prayer. Section 1O7 (12) of the Central Goods and Sen.ices Tax Act, 2017 reads thus: Section 107. Appeals to Appellate Authority. (1) to (11) xxx (i 2) The order of the Appellate Authority disposing of the appeaj shall be in writing and shall state the pnint"-fo. determination, the decision thereon and the reasons for such decision.

6. In the light of the statutory mandate ingrained in aforesaid section, it is obligatory for the appellate authority to determine the point of determination and reach to a conclusion bv assigning adequate reasons. The appellate authority has failed to discharge aforesaid statutory obligation and did not assign reasons for the cohclusions reached by it.

7. The Supreme Court emphasized the need of assigning reasons in administrative, quasi-judicial and judicial proceedings in the case of Kranti Associates (pl Ltd. v. Masood Ahmed Khanl. The relevant portion reads as under: "12. The rrecessity of giving reason by a body or authority in support of its decision came up for consideration befc,re ihis Court in several cases. Initially this Court recognised a sort of demarcation between administrative orders- and quasi_ judicial orders but with the passage of time the distinction ' lzoro; s scc +so 3 between the two got blurred and thinned out and virtually reached a vanishing point in the judgment of this Court in A.K. Kraipakv. Union of Indial(19691 2 SCC 2621.

13...

14. The expression "speaking order" was hrst coined by l,ord Chancellor Earl Cairns in a rather strange context. The Lord Chancellor, while explaining the ambit of the writ of certiorari, relerred to orders with errors on the face of the record and pointed out that an order with errors on its face, is a speaking order.

15. This Court always opined that the face of an order passed by a quasi-judicial authorit5z or even an administrative authorit5r affecting the rights of parties, must speak. It must not be like the "inscrutable face of a sphinx".

47. Summarising the above discussion, this Court holds: (a) In India the judicial trend has always been to record reasons, even in administrative decisions, if such decisions affect anyone prejudicially. (b) A quasi-judicial authority must record reasons in support of its conclusions. (c) Insistence on recording of reasons is meant to serve the wider principle of justice that justice must not only be done it must also appear to be done as well. (d) Recording of reasons also operates as a vaiid restraint on any possible arbitrary exercise of judicial and quasi-judicial or even administrative power. (e) Reasons reassure that discretion has been exercised by the decision maker on relevant grounds and by disregarding extraneous considerations. (f Reasons have virtually become as indispensable a component of a decision-making process as observing principles of natural justice by judicial, quasi-judicial and even by administrative bodies. 4 (9) Reasons facilitate the superior courts. process of judicial revlew by '",a (h). The- ongoing judicial trend in all countries commltted to rule of law and constitutionai governance is in lavour of reasoned decisions based on relevant facts. This is virtually the iifeblood of judicia-l decision_making justilying thl principle that reason is the soul ofjustice. (z) Judicial or even quasi-judicial opinions these dar.s can be as. diflerent as the judges and authorities who d.lii,.. il;;. All these decisions serve one common purpose wh ich is to demonstrate by reason that the relevant factors hrave been objectively considered. This is important for sustarning the litigants' faith in the justice delivery system. fu) Insistence on reason is a requirement for both judicial accountability and transparency. .a (/c) Il judge or a quasi-judicial authorig is nor candid enough about his/her decision_making pricess tf.,.en it is impossible to know whether the person i."ial"g is faithful to the doctrine of precedent or to principles of incrEmentalism. (l) Reasons in support of decisions must be cogent, clear and succinct. .{ pretence of reasons or ,,rubber_stairp rea.sons,, is not to be equated with a valid decision_making proces". -(m) It cannot be doubted tha t transparency is the sine qua non of restraint on abuse ofjudicial po*..". Transpa rency in decision-making not only makes the judges ;;d';;;;;i"; makers less prone to errors but also -"t.]" tn.- . sr: bject to broader- s<:rutiny. (See David Shapir o in Oe1"n"e of Juclicial Candor [(1987) 1OO Harvard Law Rlview 23137] .) ^was_ (n) Since the requirement to record reasons emanales from the broad doctrine of fairness in decision-mat<ing, tfre saia requirement is now virtually a component of human rights considered part of Strasbourg Jurispmdeice. See R11z Toija.v. Spain[(19941 19 EHRR sES; oHRn. at sOZ y1r_a.19 andAngav. tlniuersitg of Oxford [2001 EWCA Civ 405 (CA)l , wherein the Couri ..f....d to Article 6 of the European Convention of Human Rights which rcquires, "adequate and intelligent reasons -r"1 b. given for udicial decision s". 5 (o) In all common law jurisdictions judgments play a vital role in setting up precedents for the future. Therefore, for development of law, requirement of giving reasons for the decision is of the essence and is virtually a part of "due process." 8 In this view of the matter, the impugned appellate order dated 28.11.2024 is Set aside. The matter is restored in the file of the appellate authority. The petitioner shall appear before the appellate authority or\ 06.03.2025 at 11:30 A.M. for which no separate notice will be required to be issued. The appellate authority shall rehear the petitioner and pass a fresh order in accordance with law

9. With aforesaid and without expressing any opinion on merits of the case, this Writ Petition is disposed of. No costs. Interlocutory applications, if any pending, shall also stand closed. SD'. K.AM AJI R ASSISTANT REGTS ,TTRUE COPY// SECTION OFFICER

1. The Appellate Joint Commissioner of State Tax' Hyderabad Rural Division' ' uvieiibao' ^ --'oner of state Tax, Mehdipatnam-l circle' charminar' I ifie Assistant Commlssl ; +il3eJilalpal secretary' Revenue (cr) Department' relansana secretariat' .. ihttji,"Jgf:'nion or lndia'Ministry or Finance' North Block' New Delhi - ;t***un",.iLl',1,T#""Ji:$:?tEtr"?:3:x3it"#'?'ll*i"''*'#"n' 6. One CC to SRI. SHAIK JEE LANI BASHA Advocate IoPucl 7. Two CCs to SP ECIAL GP FOR STATE TAX, High Court for the State of B. Ohe CC to SRI. DOMINIC FERNANDES, SENIOR SC FO R cBlc [oPUCI IPRAVEE N KUMAR, DY. SOLICITOR GENERALOF -'100 001. Telangana, at HYd erabad [OUT] One CC to SRI. GAD alA{olipal " - -,-n lr^^i^a o \ To G t I .\ -r_\ i' rl t, ,,..' ../ ... : - zt rir i025 .t::..-.,., HIGH COURT DATED:21 10212025 ORDER WP.No.S147 of 2025 \ DISPOSING OF THE WRIT PETITION WITHOUT COSTS "r\r