“Reason Is The Heartbeat of Every Conclusion”: Allahabad HC While Setting Aside Non Speaking Order Cancelling GST Registration

Update: 2023-10-14 06:30 GMT

The Allahabad High Court has set aside an impugned order of the Assistant Commissioner, Commercial Tax and the order of the appellate authority (Additional Commissioner) which had cancelled GST registration of proprietor without any cogent reason. The Court now has remitted the matter back to the appellate authority and further directed to pass a fresh reasoned and speaking order in accordance with law, expeditiously, preferably within a period of two months.

A bench of Justice Piyush Agrawal observed, “Reason is the heart beat of every conclusion. In the absence of reasons the order becomes lifeless. Non recording of reasons renders the order to be violative of principles of natural justice. Reasons ensures transparency and fairness in decision making. It enables litigant to know reasons for acceptance or rejection of his prayer. It is statutory requirement of natural justice. Reasons are really linchpin to administration of justice. It is link between the mind of the decision taker and the controversy in question. Thus failure to give reasons amounts to denial of justice”.

Advocate Pranjal Shukla appeared for the petitioner and ACSC Rishi Kumar appeared for the respondents.

In the present matter, the petitioner was a proprietorship firm and engaged in the business of civil construction works in various government departments. On December 7, 2019 a show cause notice was issued to the petitioner but no reply was submitted, therefore by order dated December 20, 2019, the G.S.T. registration of the petitioner was cancelled.

Pursuant to which against the said order, the petitioner preferred an appeal which also came to be rejected by the impugned order dated June 27, 2022.

The petitioner thus contended that the show cause notice was issued for cancellation of registration without any date and time for appearing before the authority concerned as provided under Section 29 (2) under the Act. However, by the impugned order, the GST registration of the petitioner was cancelled without assigning any reason.

It was further submitted that the appellate authority also dismissed the appeal filed by the petitioner without assigning any cogent reason. Therefore, as the show cause notice was vague and did not refer any particular fact as required under the Act, the impugned order was liable to be set aside.

Thus the court observing the impugned order noted that it was passed without recording any cogent reason for cancelling the GST registration. While referring to the Supreme Court’s view in State of Rajasthan v. Rajendra Prasad Jain, (2008)15 SSC 711 the bench stated that 'reason is the heartbeat of every conclusion, and without the same it becomes lifeless’.

“It is the reasoning which ultimately culminates into final decision which may be subject to examination of the appellate or other higher Courts. It is not only desirable but, in view of the consistent position of law, mandatory for the Court or Authority to pass orders while recording reasons in support thereof, however, brief they may be. It is a settled canon of legal jurisprudence that the Courts/Authorities are vested with discretionary powers but such powers are to be exercised judiciously, equitably and in consonance with the settled principles of law. Whether or not, such judicial discretion has been exercised in accordance with the accepted norms, can only be reflected by the reasons recorded in the order impugned before the higher Court. Often it is said that absence of reasoning may ipso facto indicate whimsical exercise of judicial discretion”, the bench noted in the order.

Accordingly, while allowing the writ petition, the bench further observed, “Providing of reasons in orders is of essence in judicial proceedings. Every litigant who approaches the Court with a prayer is entitled to know the reasons for acceptance or rejection of such request. Either of the parties to the lis has a right of appeal and, therefore, it is essential for them to know the considered opinion of the Court to make the remedy of appeal meaningful”.

Cause Title: M/S Namo Narayan Singh v. State Of U.P. And 2 Others [Neutral Citation No-2023:AHC:194723]

Click here to read/download the Order




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