Allowed

M/S Bhatia Wine Merchants Private Limited v. State of Chhattisgarh

Chhattisgarh HC6 Jul 2018WPC/1439/2018

Case brief

AI extract

What is this about?

The High Court of Chhattisgarh held that the Collector failed to record any reasons while imposing a significant penalty of ₹ 98 lakhs on the petitioner without passing a speaking order as required by law; accordingly, the order was set aside and remitted for fresh adjudication.

What did the court decide?

The impugned order dated 8.5.2018 imposing a penalty of ₹ 9858389/- passed by Respondent No.3 is set aside and the matter remitted to the Collector for a fresh hearing and decision within 40 days.

M/S Bhatia Wine Merchants Private Limited Vs… — Service and Employment | Chhattisgarh HC (2018)

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NAFR

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HIGH COURT OF CHHATTISGARH, BILASPUR

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WPC No.1439 of 2018

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M/s Bhatia Wine Merchants Private Limited Through The Director M/s Bhatia Wine Merchants Private Limited, Village-Dhuma, BlockPatharia Tah-Mungeli, Distt – Bilaspur

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----Petitioner

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Versus

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State of Chhattisgarh Through the Secretary to the Govt. of CG, Department of Excise, Mantralaya, Mahanadi Bhawan Naya Raipur : PS-Rakhi, Raipur CG

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The Commissioner (Excise) Raipur CG

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The Collector (Excise) Mungeli, Distt – Mungeli CG

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District Excise Officer (Distilleries) M/s Bhatia Wine Merchants Private Limited, Village-Dhuma, Block-Patharia Tah-Mungeli, Distt – Bilaspur

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The Accountant General (Audit) : Raipur Distt : Raipur CG

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---- Respondents

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--------------------------------------------------------------------------------------------For Petitioner : Mr.Anurag Dayal Shrivastava, Advocate For Respondents No.1 to 4 : Mr.Arun Sao, Dy.A.G. For Respondent No.5 : Mr.Raj Kumar Gupta, Advocate

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Hon'ble Shri Justice Sanjay K. Agrawal

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Order on Board

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06/07/2018

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Learned counsel for the petitioner would submit that the Collector, Mungeli while deciding the case of the petitioner has not recorded any reasons and passed the order directing recovery of ₹ 9858389/-, which is unsustainable and bad in law.

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On the other hand, learned Deputy Advocate General for respondents No.1 to 3/State would support the impugned order.

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I have heard learned counsel for the parties and considered their rival submissions made herein-above and also went through the records with utmost circumspection.

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It is correct to say that in the impugned order learned Collector has set out the submission of the parties and thereafter held as under:-

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“vukosnd dk mijksDr tokc ekU; fd;s tkus ;ksX; ugh gSA NRrhlx<+ fons'kh efnjk fu;e] 1996 ds fu;e 13 esa fufgr izko/kkukuqlkj mnxzg.k ;ksX; 'kqYd :i;s&9858389-00 olwy djus dk vkns'k fn;k tkrk gSA

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;g vkns'k fnukad 8-5-18 dks esjs gLrk{kj ls tkjh fd;k x;kA”

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In the matter of Vishnu Dev Sharma v. State of U.P. 1 the

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Supreme Court has observed as under:-

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“9. Even in respect of administrative orders Lord Denning M.R. in Breen v. Amalgamated Engineering Union² observed “The giving of reasons is one of the fundamentals of good administration”. In Alexander Machinery (Dudley) Ltd. v. Crabtree³ it was observed: “Failure to give reasons amounts to denial of justice. Reasons are live links between the mind of the decision taker to the controversy in question and the decision or conclusion arrived at”. Reasons substitute subjectivity by objectivity. The emphasis on recording reasons is that if the decision reveals the inscrutable face of the sphinx, it can, by its silence, render it virtually impossible for the Courts to perform their appellate function or exercise the power of judicial review in adjudging the validity of the decision. Right to reason is an

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1 2008 AIR SCW 794

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2 (1971 (1) All ER 1148)

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3(1974 LCR 120)

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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 a sphinx is ordinarily incongruous with a judicial or quasi-judicial performance.

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This Court in State of Orissa v. Dhaniram Luhar⁴ has while reiterating the view expressed in the earlier cases for the past two decades emphasised the necessity, duty and obligation of the High Court to record reasons in disposing of such cases. The hallmark of a judgment/order and exercise of judicial power by a judicial forum is to disclose the reasons for its decision and giving of reasons has been always insisted upon as one of the fundamentals of sound administration justicedelivery system, to make known that there had been proper and due application of mind to the issue before the Court and also as an essential requisite of principles of natural justice. Any judicial power has to be judiciously exercised and the mere fact that discretion is vested with the court/forum to exercise the same either way does not constitute any license to exercise it at whims or fancies and arbitrarily as used to be conveyed by the well-known saying: “varying according to the Chancellor's foot”. Arbitrariness has been always held to be the anathema of judicial exercise of any power, all the more so when such orders are amenable to challenge further before higher forums. Such ritualistic observations and summary disposal which has the effect of, at times, cannot be said to be a proper and judicial manner of disposing of judiciously the claim before the courts. The giving of reasons for a decision is an essential attribute of judicial and judicious disposal of a matter before courts, and which is the only indication to know about the manner and quality of exercise undertaken, as also the fact that the court concerned had really applied its mind.”

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4 2004 (5) SCC 568

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In the matter of Rajesh Kumar & others v. Dy CIT &

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others 5 the Supreme Court observed as under:-

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“21.....But it is beyond any civil that ordinarily unless excluded by operation of a statute, the superior courts while exercising power of judicial review shall proceed on the basis that assignment of reasons is imperative in character. When an authority be it administrative or quasi-judicial adjudicates on a dispute and if its order is appealable or subject to judicial review, it would be necessary to spell out the reasons therefor.”

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Reverting to the facts of the present case, it appears that it is a case of order imposing penalty for failure to carry out statutory obligation, therefore, learned Collector ought to have passed a reasoned and speaking order while imposing penalty as huge penalty has been imposed to the petitioner, but learned Collector only set out the submissions of the parties and thereafter held that reply is not satisfactorily and proceeded to pass the order of penalty to the extent of ₹ 9858389/-, which is unsustainable and bad in law being unreasoned and non-speaking.

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Accordingly, the impugned order dated 8.5.2018 (Annexure P/1) passed by respondent No.3 is hereby set aside. The matter is remitted to the Collector, Mungeli for hearing the parties and thereafter taking a decision afresh within 40 days from the date of receipt of certified copy of this order. However, it is made clear that this Court has not expressed any opinion on merits of the matter and the

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