1 BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 20.04.2011 CORAM: THE HONOURABLE MR.JUSTICE B.RAJENDRAN W.P.(MD)Nos.3586 to 3588 of 2011 and M.P.(MD) Nos. 1, 1 and 1 of 2011 M/s.Adityaa Traders, Represented by its Managing Partner K.Arivumani, 4/211, Covail Main Road, Andankoil Post, Karur-2. Petitioner in both WPs Vs. 1.The Special Committee, O/o.Commissioner of Commercial Taxes, Ezhilagam, Chepauk, Chennai. 2.The Deputy Commercial Tax Officer, Karur (West) Assessment Circle, Karur. Respondents in both WPs Common Prayer: Writ Petition filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorari calling for the records in SCP No.38/10, 39/10 and 40/10 Ref No.M1/2541/08, M1/2542/08 and M1/2543/08, dated 27.01.2011 respectively on the file of the first respondent and quash the same as illegal, arbitrary and against law. For Petitioner M/s.S.Karunakar For Respondents Mr.S.C.Herold Sigh Government Advocate. COMMON ORDER All the three writ petitions are taken up together as the matter pertaining to the assessment of three different years of the assessee are one and the same. By consent, the main writ petitions are taken up together for deciding the matter. 2. The petitioner was aggrieved by the order passed by the second respondent under Section 12(2) of the Tamil Nadu General Sales Tax Act, 1959, for the years 2003-04, 2004-05 and 2005-06 and hence, he approached the first respondent viz., the Special Committee in the office of the Commissioner of Commercial Taxes for redressal. Normally, an appeal should have been preferred, but, the appeal could not be preferred for want of payment of 25% of tax demanded. He would contend that the principles of natural justice have been violated when there is a provision under Section 16-D of the TNGST Act for approaching the Special Committee. Before the Committee, the https://hcservices.ecourts.gov.in/hcservices/ 2 petitioner has merely raised a point that he has purchased cement from the authorised dealers viz., M/s. Chettinad Cements and M/s.India Cements and the entire transactions are duly accounted for and taxes are paid which could have been easily verified. Therefore, there was no need for appeal and hence, he approached the first respondent Committee. 3. The main grievance of the petitioner is that he was not given sufficient opportunity to put forth his case especially when he has purchased cement only from the authorised dealers which could have been easily verified. His present grievance is that when he approached the Special Committee under Section 16(d) of the Act, the Special Committee has passed an order without giving an opportunity of being heard or giving any reason and straight away accepted the order of the assessing officer. If an order is passed without giving any reason, as per the order of this Court dated 25.08.2009 made in W.P.(MD)No.2576 of 2009 (M/s.Ashok Agencies, Rep. by its Proprietor N.Malarkodi v. The Special Committee and another) following the Supreme Court decision reported in (1990) 4 SCC 594 (S.N.Mukherjee v. Union of India), such an order is liable to be quashed. His further grievance is that if he had been given an opportunity to appear before the Special Committee, he would have convinced the said committee. 4. The learned Government Advocate would contend that there is no need for a detailed order, but, what was stated in the order is only the acceptance of the reason stated by the assessing officer; of course, the authority has taken into consideration, all the papers submitted by the petitioner; merely because he was not given a personal enquiry, that, by itself, will not vitiate the order. 5. Heard both parties. 6. The only grievance of the petitioner is that he approached the Special Committee only on the ground that the assessing officer has not followed the principles of natural justice and has not given sufficient opportunity and he has made best of judgment without considering that the petitioner was after all as a dealer he has purchased cement from the Chettinad Cements and India Cements which could have been easily verified as borne out by the records which has not been done unfortunately. The Special Committee has only stated that in spite of the opportunity given by the Assessing Officer, the petitioner has not replied and that is accepted and no special independent reason has been given by the Committee for dismissing the application. It is also now made clear that no personal enquiry was conducted before the order was passed. In this connection, I am also guided by an order dated 25.08.2009 passed by this Court in W.P.(MD) No.2576 of 2009 (M/s.Ashok Agencies, Rep. by its Proprietor N.Malarkodi v. The Special Committee and another) following the Supreme Court judgment reported in (1990) 4 SCC 594 (S.N.Mukherjee v. https://hcservices.ecourts.gov.in/hcservices/ 3 Union of India). The relevant portion of judgment reads as follows: "11. Therefore, the Committee while considering the petition under Section 16(D) of the Act has to examine as to whether there is a violation of the provisions of the Act or Rules and that the order of the assessment authority has been passed without following the principles of natural justice. 12. As could be seen in the impugned orders, the Committee had rendered a finding, that on perusal of the files, it revealed that sufficient opportunity had been given to dealer to file objection and there is no violation of principles of natural justice and Act and Rules. 13. In my opinion, such a finding without reasons itself would be in violation of the principles of natural justice. In the case of Mukherjee's case reported in S.N. Mukherjee v. Union of India, (1990) 4 SCC 594, the Hon'ble Supreme Court held in paragraph Nos: 36, 39 and 40, are as follows:- "36. Reasons, when recorded by an administrative authority in an order passed by it while exercising quasi- judicial functions, would no doubt facilitate the exercise of its jurisdiction by the appellate or supervisory authority. But the other considerations, referred to above, which have also weighed with this Court in holding that an administrative authority must record reasons for its decision, are of no less significance. These considerations show that the recording of reasons by an administrative authority serves a salutary purpose, namely, it excludes chances of arbitrariness and ensures a degree of fairness in the process of decision- making. The said purpose would apply equally to all decisions and its application cannot be confined to decisions which are subject to appeal, revision or judicial review. In our opinion, therefore, the requirement that reasons be recorded should govern the decisions of an administrative authority exercising quasi-judicial functions irrespective of the fact whether the decision is subject to appeal, revision or judicial review. It may, however, be added that it is not required that the reasons should be as elaborate as in the decision of a court of law. The extent and nature of the reasons would depend on particular facts and circumstances. What is necessary is that the reasons are clear and explicit so as to indicate that the authority has given due consideration to the points in controversy. The need for recording of reasons is greater in a case where the order is passed at the original stage. The appellate or revisional authority, if it affirms such an order, need not give separate reasons if https://hcservices.ecourts.gov.in/hcservices/ 4 the appellate or revisional authority agrees with the reasons contained in the order under challenge. ..... 39. The object underlying the rules of natural justice "is to prevent miscarriage of justice" and secure "fair play in action". As pointed out earlier the requirement about recording of reasons for its decision by an administrative authority exercising quasi-judicial functions achieves this object by excluding chances of arbitrariness and ensuring a degree of fairness in the process of decision-making. Keeping in view the expanding horizon of the principles of natural justice, we are of the opinion, that the requirement to record reason can be regarded as one of the principles of natural justice which govern exercise of power by administrative authorities. The rules of natural justice are not embodied rules. The extent of their application depends upon the particular statutory framework whereunder jurisdiction has been conferred on the administrative authority. With regard to the exercise of a particular power by an administrative authority including exercise of judicial or quasi-judicial functions the legislature, while conferring the said power, may feel that it would not be in the larger public interest that the reasons for the order passed by the administrative authority be recorded in the order and be communicated to the aggrieved party and it may dispense with such a requirement. It may do so by making an express provision to that effect as those contained in the Administrative Procedure Act, 1946 of U.S.A. and the Administrative Decisions (Judicial Review) Act, 1977 of Australia whereby the orders passed by certain specified authorities are excluded from the ambit of the enactment. Such an exclusion can also arise by necessary implication from the nature of the subject matter, the scheme and the provisions of the enactment. The public interest underlying such a provision would outweigh the salutary purpose served by the requirement to record the reasons. The said requirement cannot, therefore, be insisted upon in such a case. 40. For the reasons aforesaid, it must be concluded that except in cases where the requirement has been dispensed with expressly or by necessary implication, an administrative authority exercising judicial or quasi-judicial functions is required to record the reasons for its decision." 7. Since it is well settled that recording of reasons is a sine qua non and it has not been done, naturally, the Court can interfere. In this case, admittedly, the Special Committee has merely accepted the view of the assessing officer without giving any independent reason and the relevant paragraphs of the order passed by the Special Committee read as under: "The contention put forth by the dealer is not acceptable. The assessment was made in this case after https://hcservices.ecourts.gov.in/hcservices/ 5 observing the provisions of the Act and there is no violation of provisions of the Act and there is no violation of Principles of Natural Justice as alleged by the dealer. The contention of the petitioner was verified with the relevant records and documents. Notices have been properly issued and were served properly. But the petitioners did not respond and hence orders were passed. There is no violation of principles of natural justice." It is clear from the impugned order that the committee has not at all given any reason for accepting the order. It is identical as in the case cited earlier. Hence, taking into consideration, the limited request of the petitioner, at this stage that when given an opportunity before the Special Committee and when given a personal hearing, he will produce all the records and he will convince the Special Committee in regard to the assessment especially, which could be easily verified because of transactions with the Chettinad Cements and India Cements, the impugned order is set aside and the matter is remitted back to the Special Committee with a direction to afford sufficient opportunity to the petitioner to produce the documents and adduce evidence and to pass orders in accordance with law and on merits. The petitioner shall produce the relevant documents on notice being issued to him by the Committee. With the above directions, the writ petitions are allowed and the matter is remitted back to authority for fresh disposal. No costs. Consequently, connected miscellaneous petitions are closed. Sd/ Deputy Registrar (LA) /True Copy/ Assistant Registrar To 1.The Special Committee, O/o.Commissioner of Commercial Taxes, Ezhilagam, Chepauk, Chennai. 2.The Deputy Commercial Tax Officer, Karur (West) Assessment Circle, Karur. +one cc to Special Government Pleader, Sr.No. 14579 Order made in W.P.(MD)No.3586 to 3588 of 2011 20.04.2011 srm/SMA/29.6.2011/4C/5P https://hcservices.ecourts.gov.in/hcservices/