TAXAP/1357/2008 1/8 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL No. 1357 of 2008 For Approval and Signature: HON'BLE MR.JUSTICE D.A.MEHTA HON'BLE SMT. JUSTICE ABHILASHA KUMARI ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= PATWA BROTHERS - Appellant(s) Versus THE STATE OF GUJARAT - Opponent(s) ========================================================= Appearance : MR PRAKASH K JANI for Appellant(s) MR KIRTIKANT THAKER for Appellant(s) MR KETAN J DWIVEDI, AGP for Opponent(s) ========================================================= CORAM : HONOURABLE MR.JUSTICE D.A.MEHTA and HON'BLE SMT. JUSTICE ABHILASHA KUMARI Date : 27/11/2008 ORAL JUDGMENT (Per : HON'BLE SMT. JUSTICE ABHILASHA KUMARI) TAXAP/1357/2008 2/8 JUDGMENT 1. By filing this appeal, the appellant-assessee has challenged the order dated 20.12.2007 passed by the Gujarat Value Added Tax Tribunal, Ahmedabad, (“the Tribunal”) and has proposed the following questions: “(1) Whether, in the facts and circumstances of the case, the Tribunal was right in dismissing the appeal without recording its finding of fact on the material contentions raised before it, and in making a very short/ cryptic order? (2) Whether, in the facts and circumstances of the case the Tribunal was right in not ascertaining the facts or in not remanding the case to the Assessing Officer to arrive at just and fair conclusions? (3) Whether the Tribunal, in the facts and circumstances of the case was right in not canceling the assessment, the tax liability and interest, penalty and such other dues?” 2. Mr.Prakash K.Jani, learned counsel for the appellant, has submitted that apart from the merits of the case, the Tribunal has failed to independently deal with the issues and contentions TAXAP/1357/2008 3/8 JUDGMENT raised by the appellant and has dismissed the appeal by passing a short and cryptic order, devoid of any reasons. 3. The learned Assistant Government Pleader has supported the order passed by the Tribunal. 4. Having heard the learned counsel for the respective parties, perusing the order dated 20.12.2007 passed by the Tribunal, and for reasons recorded hereunder, we do not intend to enter into the merits of the appeal and, therefore, we refrain from answering the proposed questions. Instead, we admit the appeal and formulate the following substantial question of law, which arises for consideration, in the present appeal: “Whether, on the facts and in the circumstances of the case, the order of the Tribunal is just and proper?” 5. The appellant is a partnership firm. On 18.10.2003, an inspection/ search was carried out at the premises of the appellant by the Sales Tax Officer (Investigation), Gandhinagar. Consequently, a notice was issued and served upon the appellant, calling TAXAP/1357/2008 4/8 JUDGMENT upon it to produce the record of the firm for the period from 01.04.2003 to 18.10.2003, which details were duly submitted. Assessment for the Assessment Year 2004-2005 came to be made by the Sales Tax Officer by order dated 15.09.2004, making the appellant liable to payment of tax to the tune of Rs.2,825/-. Notice dated 18.10.2003 was issued to the appellant to which a reply was furnished. Similarly, to the notice dated 25.02.2005, the appellant submitted its reply. Thereafter, the Assessing Officer, under Section 44 of the Gujarat Value Added Tax Act, 2003, (“the Act”) re-assessed the appellant-firm and passed an order determining the tax liability as Rs.2,69,943/-. A Rectification Order came to be passed under Section 72 of the Act and the tax liability reduced to Rs.1,57,194/-. Aggrieved and dissatisfied with the same, the appellant filed an appeal before the Appellate Authority, which was dismissed by order dated 16.08.2007. The appellant preferred a Second Appeal before the Tribunal, which has been dismissed by order dated 20.12.2007, impugned in the present appeal. 6. A perusal of the order dated 20.12.2007 of the TAXAP/1357/2008 5/8 JUDGMENT Tribunal makes it amply clear that the Tribunal has merely recorded a summary of the proceedings that took place in the case of the appellant. Although it is mentioned that both the appellant and the Government Agent were heard on 13.12.2007, the contentions raised by either of the parties have not been reproduced or dealt with by the Tribunal independently and no reasoning has been given in support of its order. This is clear from a reading of the operative paragraph of the order of the Tribunal, which is reproduced as under: “6. The Tribunal has carefully seen the reassessment order which is a speaking order. The Government Agent in his submissions has stated that the order is passed on the Panchnama also signed by the appellant. The appellant could not show that the statement of the Government Agent that the record and the books of accounts were not complete was wrong. The Government Agent has stated that this was admitted by the appellant in the written statement. Moreover, the show-cause notice Dtd.02/02/05 is also very clear which refers to enhancement and penalty proposed to be imposed. In the reassessment order the date of service TAXAP/1357/2008 6/8 JUDGMENT of notice in Form 37 is also mentioned. In view of this, there is no reason to interfere with the final reassessment order.” Apparently, what has weighed with the Tribunal is only the re-assessment order, the contents of which have merely been reproduced. No independent reasons have been given by the Tribunal nor any findings arrived at to show as to why, and on what ground, the Tribunal thought it fit to agree with the said order. Apart from mentioning that the re-assessment order has been perused and found to be a speaking one, the Tribunal has failed to deal with the contentions and issues raised before it so as to arrive at an independent finding in respect of the same. Moreover, the impugned order of the Tribunal is an order devoid of any reasons. It is a settled position of law that an order should contain reasons for the conclusions arrived at and only then can it be said to be an order passed in accordance with law. 7. Under Section 73(6) of the Act, the Tribunal is statutorily bound to pass a just and proper order. Section 73(6) of the Act reads as under: TAXAP/1357/2008 7/8 JUDGMENT “Subject to such rules of procedure as may be prescribed, an appellate authority may pass such order on appeal as it deems just and proper.” The words “as it deems” appearing in sub-section (6) of Section 73 cannot be construed to mean that the Tribunal can pass any order, and deem it to be “just and proper” on its own ipse dixit. 8. It is a settled position of law that an order passed by a quasi-judicial or judicial forum or, for that matter, even by an administrative authority, should contain reasons, however brief, to show that there has been a proper application of mind and only then can it meet with the requirements of law and be termed as a “just and proper” order. 9. Tested upon the above touchstone, the impugned order of the Tribunal can, by no stretch of imagination, be said to be a just and proper order, being an order devoid of any reasons. We, therefore, answer the question in the negative. 10.Accordingly, the Appeal is allowed. The order dated TAXAP/1357/2008 8/8 JUDGMENT 20.12.2007 passed by the Gujarat Value Added Tax Tribunal, Ahmedabad, in Second Appeal No.523 of 2007, is quashed and set aside. The Second Appeal is restored to the file of the Gujarat Value Added Tax Tribunal, Ahmedabad, for fresh decision in accordance with law. (D.A.Mehta, J.) (Smt.Abhilasha Kumari, J.) (sunil)