Disposed

Mukunda Flexi Pack v. The Appellate Joint Commissioner (State Tax)

Telangana HC17 Feb 2025WP/4446/2025

Case brief

AI extract

What is this about?

GST appeal dismissed by the appellate authority without any discussion of the grounds raised in the seven-page appeal memo. Following the Supreme Court's ruling that reasons are the heartbeat of conclusions, the High Court set aside the appellate order, directed a rehearing, and ordered provisional lifting of the bank account attachment.

What did the court decide?

Impugned appellate order set aside; appellate authority to rehear on 27.02.2025 and pass fresh order; bank account attachment provisionally lifted subject to final outcome; no costs.

Mukunda Flexi Pack Vs The Appellate Joint… — GST and Indirect Tax | Telangana HC (2025)

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HIGH COURTFOR THE

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PRESENT

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THE HONOURABLE THE I rHE'o"o'*"..tlHnql''tt'usrlcE^suJoYPAUL SMTJUSilCE RENUKA YARA

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Between:

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WRIT PETtTtON NO: 44460F 2025

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AND

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...PETITIONER

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'.ffi,:Hffi,trffiflt##ffiffiffiffipetition under Arl ...RESPoNDENTS ifiTTffi "'"'i;il^J #HI;#$^{p'^t.,Iil T:} of Writ of Mandamus dectr.i.,.. *i^ :'^:,:""t' rnore particularly one in the nature ""'ono"'l i' i""'ing-,,," l.x;x1.Tl#:H.nff#J:^ll1 the APPeal * ",rrtiiJ;:t"J^""T;:lT::: issued bi2nd nu"ponounrs ,il::,;;;" unsigned DRc-01 dated ;;ffi J:Ti#",:;::,:;,::,:::I:",,. cause notice for ,--J sGST of Rs.47,g3,71|r_.show or sGSr or Rs 4,78,371^:'JJxaiffi"ffi[:,#[

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unreasoned order wi:h pre-determined mind, without considering^.the documentary evidence submitted iilong with Appeal and also at the time of Hrtaring read with Appeal Grounds, is :ontrary to principles of natural justice illeg al in violation of Section 65(6) r/w 65and (7) Act and arbitrary, violative of Artict3 t9(i Xg), 265, 3004 of the Constitution of lndia and to set aside the lmpugned orJer including the Garnishee Notice issued by the 2nd Respondent to the 6th Respr.rndent and or to direct the 1 st Respondent to dispose the Rectification Applicati,rn filed u/s 161 dated 2510912024.

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lA NO: 1 OF 2025

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Petition under Section 151 CPC praying that in the circums:ances stated in the affidavit filed in support of the petition, the High Court may b,:r pleased to (a) grant stay of all fr.rrtherr proceedings in pursuance the impugned Ap:peal order No. 2D3608240582908 dated 17108/2024 issued by the 1st Respon,Jent dismissing the appeal filed confirming unsigned Assessment Order i:,;sued by 2nd Respondent uls 73 cf rGST/CGST Acts 2017 daled 27t1212o2!r an6 gn.;nn"o Notice DRC-07 dated 2711212023 and unsigned DRC-01 dated 29t(\912o23 against unsigned DRC-o'1 with unsigned altachment of show cause noticr,r for the perlod 2017-18 Demanding SGST of Rs.47,83,710/-CGST of Rs.47,83 710t, |GST of Rs.51,73,150/.Penalt1,of SGST of Rs.4,78,371l- CGST of Rs. 4.78 371l1, |GST of Rs.5,17,315/-, (b) to ,;et aside the Garnishee Notice issued oh 7ij(1Xc) in Form DRC-13 by the 2nd Respondent to the 6th Respondent enabling flre petitioner to operate his bank account, pending disposal of this writ petition.

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Counsel for the Petitioner: SRI T.S.MURTHy Counsel for the Respondent Nos.1 TO 4: SRI SWAROOP OORILL.A, Special Govt pleader for State Tax Counsel for the Respondent No.s: SRI DOMTNIC FERNANDES, SFNTOR SC FOR CBIC Counsel forthe Respondent No.6: --

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The Court made the following: ORDER

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THE HON'BLE THE ACTING CHIEF JUSTICE SUJOY PAUL AND THE HON'BLE SMT. JUSTICE RENUKA YARA

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SrRIT PETITION No.4446 of 2025

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ORDER (Per the Hon'bte tLrc Acting Chief Justice S,tjog paul):

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Sri T.S. Murthy, learned counsel for the petitioner; Sri Swaroop Oorilla, learned Special Government pleader for State Tax, for respondent Nos. I to 4 and Sri Dominic Fernandes, learned Senior Standing Counsel for CBIC, for respondent No.S.

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The appellate order dated 17.08.2024 is subject matter of chaJlenge in this petition.

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The singular ground raised by learned counsel for the petitioner is that against the basic order, the petitioner preferred a statutory appeal which is running in almost seven pages. The petitioner has mentioned the facts and grounds, on the strength of which, said statutory appeal was preferred. However, the "discussion and findings' paragraph of the impugned appellate order shows that there is no iota of discussion about the groulds raised by the petitioner in its appeal memo. In absence of reasons, the consideration was an empty formality ald therefore, the impugned appellate order may be set aside and the appellate authority may be directed to rehear the petitioner and pass a fresh order.

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5 leamed Special Government pleader for State ,lax raised formal objection .

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We have examined the "discussion and tindings,,given by the appellate aut rorit5r and we find substa,ce in the ar1:Srment of leamed counsel for the petitioner that the grounds raisr:d by the petitioner in its zrppeal memo have not been considered bv the appellate authorr'ty

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The .Apex Court in Kranti Associates (p) Ltd. v. Masood Ahmed Khanl opined that the reasons are hearl.beat of conclusions. In administrative, quasi-judicial and judicial orders, the reasorLs must be given. The relative portic,n reads thus:

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",12..fhe. necessit5z of giving reason by a bodv or authorir./ in support of-its iecisio; ;;"rli] ;: consider,rtion before this Court- in-'sJJe..f i1".,". Initially -his Court recognised , "; "f d;;;.#,,,r, betrveen administrative- orders ,"a - q"""rr:"jf. ,f :::.:j-"^:ll^{with the passaseof time the distincti:rn} u! rw.:c.r rne rwo got blurred ald thinned out altd vrrtua I [y reached a van ishing p"i"t ]"'iir.lr"d?-" .,, of this Ccrurt in A.K. Krat 2 sC<: 2621. tpak v ' Unton of India [( I 96 ))

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13...

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The e:<pression "speaking order, was first coined by l,ord chancellor e^art c.airns in "";;;.':;;.s,. context. l'he Lord Chanceilor, hil" ;;;il"i"* ,n. ambit of t.-re writ of certioran, reterred to orders wjth errors on the face of the record ."a poi.,t.a J"i ,nr, an order u.ith errors on its face, i";Jp;il;;;;..

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^15^{This ( ourt alwaysopined that th} e face of arL order 1>ass:d by a quasi-judicial authJ t5r or even an

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'lzoto; s scc +s6

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administrative authority affecting the rights of parties, must speak. It must not be like the "inscrutable face of a sphinx".

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Summarising the above discussion, this Court holds:

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(a) In India the judicial trend has always been to record reasons, even in administrative decisions, if such decisions affect anyone prejudicially.

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(b) A quasi-judicial authority must record reasons in support of its conclusions.

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(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.

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(d) Recording of reasons also operates as a valid restraint on any possible arbitrary exercise of judicial and quasi-judicial or even administrative power.

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(e) Reasons reassure that discretion has been exercised by the decision-maker on relevant grounds and by disregarding extraneous considerations.

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(fl Reasons have virtually become as indispensable a component of a decision-maling process as observing principles of natural justice by judicial, quasi-judicial and even by administrative bodies.

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(g) Reasons facilitate the proce_ss of judicial review by superior courts.

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(t{ The ongoing judicial trend in all countries committed to rule of law and constitutional governance is in favour of reasoned decisions based on relevant facts. This is virtually the lifeblood of judicial decision-making justi[ring the principle that reason is tJle soul of justice.

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(f Judicial or even quasi-judicial opinions these days can be as different as the judges and authorities who deliver them. All these decisions serve one comnon purpose which is to demonstrate by reason that the relevant factors have been objectively considered. This is important for sustaining the litigants' faith in the^jusllg;e delivery system.

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t)^Insistence on reason is a requiremetr for both 'udicial accountability ard r;r'.-p;;;";:,,,

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(Il Il .a judge or a quasi._judicial a u rhor ry is not czmdid enough abolt trrsTrre. al"i"i" ll-"L.irg pt'ocess then it is impossible ,. f.".*,lr=ther the p(.rson deciding is faithful t" ;. i.,,ii,"" .f precedent or to principle" orin".rLr,lI .,,

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l?.X."i:T:#.;:iT.l^{or decisions must bl) cosent,} of reasons or "rubberst.rmp reason"' i" ,,Pttt"tce d",i;i.;-;;;**r".*!i"1"^{be equated wittr a valid}

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(m)- It calnot be doubted. that transparenc y is the srne qua non of rer r,,r.T p o <sup>ye rs. r.u,", t"; fl "pu..,.,.;,"^{llllldl"r -} ",:il, ; makes the judges anj decrsion_makers less .rrone to errt>rs but also mak, subject to broader scnrtiny. (see David "ti^j*-. c",,a"i11t'sdi,iil;,"#Ii,"L.,"!:{f :;i:{iii,:*,

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:i?^11t." (n) ^ S^in-ce^from . the^the requirement^{broa{. d."t.i".} to record ;';t.,,,I"S leasonsi., oectsron-making, the "{q ..4"i;;;;";"i,,"'.,o* rrrttrally a component ,of f,u.ni_r"i;';;". ,;;; * . , (ronsidered part of Stra^sbffi "r";,..iri::;." . See Ruzz Toijav. soain[(199.41 -re-tilfn".sss1 BXi*,ii.i'3,^l&; !l' ::tt:i",^i;,)),,u, .y co,, t'.#.,.a"^" Io^ ;fi",10t^^("1/l .,,.:n:iern the . uon\enrion^{aoe(luate and} of^intellisen Human _night""^*hi; i:l,:,,.:J .;^{udrc Lal} decisions,.^{-tt reasonsmustbe giv en for}

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(o) In all common law iurisdictions judgments :lay a I,:l^::1.^{in setring rip precedents} for the firrure. r neretore, for developm".rt of lu*, ..q"j.._..iii .f ts i^,lllf vtrtually '11"ons a part^for of"due^{rhe decision} process..i" .ir. "r"I".li,ira

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If ther impugned appellate order is tested on the envil of principles laid down in Kranti Associates (p) Ltd. (rsupra), it could not sustai, the judiciar scrutiny because it does not deal with the grounds arld does not assign reasons for rejectirtn.

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I , ' (Zt rr/ r jCC 496

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f'-

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Resultantly, the impugned appellate order is set aside. The petitioner sha-ll now appear before the appellate authority on 27.O2.2O25 at 11:3O 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. Consequent upon passing of the impugned appellate order, if the petitioner's balk account is attached, it be provisionally lifted which will remain subject to final outcome of the appeal.

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The Writ Petition is disposed of without expressing any opinion on merits of the case. No costs.

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Interlocutory applications, if any pending, shall a-lso

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stand closed.

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SD/.V.KAVITHA ASSISTANT^REGISTRAR

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//TRUE COPY//

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CTION OFFICER

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To 1. The Appellate Joint Commissioner (State Tax)' Hyderabad erabad-500001.Rural^Division,5th ' Fffil.UiC;-nir"r' opp. cindhi Bhavan'.Nampallv' f$ , i'i;Asiisiaii'6;;iniidl;""r(State^{rax)'Nacharam-2 ci} rcle,Malkajigiri Division HYderabad.

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Division HYderabad.

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3 The Comrilissioner^{-State Tax, Govemmentof Telangana'l st Floor'CT} " c';;;I#'G6. b-dnoitior'u'in" Nampal lv' Hvderabad-50000^1' 4 The^{principal Secretary io-n"-uLnrebf bepartment;Sec76fa-n?t Buildings'} Hvderabad, State State^{of Telanqana'Telanqana'}

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