Asst.Commissioner vs M/S.Shukla & Brothers

5. It may be necessary for that to refer to the basic facts giving rise to the present appeal. The respondent claimed to be a contractor who has obtained impartible contract of constructing 400 shops in JP Market, Chhota Talab, Kota. As per the contract the shops were to be handed over to Cloth Merchant Association, Kota. The respondent had received Rs.95,26,276.00 in the year 1997-98 and Rs.22,38,026.00 in the year 1998-99. The assessing authority formed an opinion and recorded a finding that the shutters and doors were not manufactured from tax paid raw material in impartible contract and as such shutter was excluded from labour charges in the above years, and levied tax, interest, penalty and surcharge upon the respondent. The order of the assessing authority dated 19th July, 2000 and 22nd February, 2001 respectively were challenged by the respondent before the Deputy Commissioner (Appeals), Kota and intended that if the shutters were not installed in the shops, then as per the contract the shops would not have deemed to be complete. Relying upon the judgments of the Supreme Court in Gannon Dunkerley & Co. (Madras) Ltd. - State of Madras [AIR 1958 SC 560] as well as State of Rajasthan Vs. Man Industrial Corporation [(2003) 7 SCC 522] it was contended that in an impartible work contract as per the terms of that contract, the material has been used in work contract and there was no contract for 3 manufacturing shutters. Thus on account of execution of impartible work contract, the property was immovable and tax could not be levied thereon.

6. The appeal preferred by the respondent was accepted by the Deputy Commissioner vide his Order dated 23rd February, 2002. This Order was assailed in appeal by the Department before the Rajasthan Tax Board which also came to be rejected vide Order dated 18th October, 2003. The Board accepted the plea of the respondent that the shutters and doors were manufactured from tax paid raw material in a work contract, therefore, could not be the goods transferred for the purposes of levy of tax, holding the same not justifiable to set aside the levy of tax, penalty, interest or surcharge. Aggrieved from the Order of the Board dated 23rd February, 2002, the appellant filed Tax Revision before the High Court and inter alia and raised the following questions of law:-

7. As is evident from the facts narrated in the Revision Petition and the grounds raised besides raising the question of law, a factual controversy was also raised going to the very root of the case, that the rolling shutters & doors fixed by the respondent on the shops were not manufactured of tax paid material. Thus, question of law, mixed questions of law and facts were not examined by the High Court in some detail, but as already noticed, by one line order the Revision Petition was dismissed. During the course of hearing, we were informed that arguments were also addressed with reference to judgments of this Court which were also cited before the Board. However we find no mention thereof in the impugned Order. It was also contended that similar questions do arise in number of other cases, thus it was expected of the High Court to deal with the contentions rather than pass a cryptic order.

Clarity of thought leads to proper reasoning and proper reasoning is the foundation of a just and fair decision. In Alexander Machinery (Dudley) Ltd. v. Crabtree 1974 ICR 120, the Court went to the extent of observing that "Failure to give reasons amounts to denial of justice". Reasons are really linchpin to administration of justice. They are link between the mind of the decision taker and the controversy in question. To justify our conclusion, reasons are essential. Absence of reasoning would render the judicial order liable to interference by the higher Court. Reasons are the soul of the decision and its absence would render the order open to judicial chastism. The consistent judicial opinion is that every order determining rights of the parties in a Court of law ought not to be recorded without supportive reasons. Issuing reasoned order is not only beneficial to the higher Courts but is even of great utility for providing public understanding of law and imposing self-

24. We are unable to find any infirmity in the arguments advanced on behalf of the Department, that no reasons have been recorded for rejecting the contentions raised, this legal infirmity has, in fact, prejudicially affected the case of the appellant before us. The judgment of the High Court must speak for itself to enable the higher Court to do complete and effective justice between the parties.

25. For the reasons afore-recorded we set aside the order dated 29th February, 2008 and remit the case to the High Court with a request to hear the case de novo and pass appropriate order in accordance with law. To that extent the appeal is allowed.

26. There shall be no order as to costs.