Ashirwad Trading Company vs. State Of U.P. And 3 Others

Facts

The petitioner, Ashirwad Trading Company, filed a writ petition challenging an order dated January 6, 2021, passed by the Additional Commissioner, Grade-2 (Appeal)-I, Commercial Tax, Kanpur. The appeal authority had partly allowed the petitioner's appeal and reduced the penalty, treating the petitioner as the owner of the goods. The petitioner contended that the appeal authority failed to provide adequate reasoning for rejecting its submissions. The respondent State argued that the appeal authority had considered all submissions and passed a valid order. The High Court noted that the Tribunal had not yet been constituted, leading to the writ petition being entertained.

Held

The Court held that it is fundamental to the exercise of appellate jurisdiction that the appeal authority must consider and decide, after recording reasons, each ground of appeal raised and pressed. The Court found that in the present case, the appeal authority had referred to the petitioner's submissions but failed to offer any reasoning to reject them. While the appeal authority considered and offered reasons to accept the alternative plea that the petitioner was the owner of the goods, it did not make any application of mind to the main plea that there was no infraction of law and the penalty provisions were not attracted. The Court stated that in the absence of any discussion on the main issue, the order passed by the appeal authority could not be sustained to that extent and was set aside. The Court remitted the matter to the appeal authority to pass a fresh order, keeping in mind the observations that it must formulate exact points of decision, express them clearly, and offer reasons to accept or reject each ground of appeal. The consideration of the alternative issue would become operative only if the main submission was rejected. The Court directed the proceedings to be concluded expeditiously, preferably within three months.

Key Issues

1. Whether the appeal authority properly exercised its appellate jurisdiction by failing to provide reasoned decisions on all grounds of appeal pressed by the petitioner, as required by fundamental principles of appellate adjudication? 2. Whether the appeal authority's order is sustainable when it appears to have only considered and offered reasons for accepting an alternative plea while failing to address the main plea that no infraction of law occurred and penalty provisions were not attracted? Petitioner's Contentions: The petitioner argued that the appeal authority, despite referring to the submissions, did not offer any reasoning to reject them. It contended that the appeal authority's order was flawed because it did not deal with or decide the main grounds of appeal concerning the merits of the matter, only addressing an alternative plea. The petitioner emphasized that appellate authorities must consider and decide each ground of appeal with recorded reasons. Respondent's Contentions: The respondent State argued that the appeal authority had heard and decided the appeal in its entirety after considering all submissions advanced by the petitioner, and therefore, the order did not suffer from any infirmity.