Tvl.Vanitha Fireworks Industries vs. The Assistant Commissioner(St)-Iii

Held

The Court held that the impugned order dated 05.07.2021 is bad for violation of the principles of natural justice. The Court found merit in the petitioner's submission that the order was passed without dealing with their objections and was a non-speaking order. Citing the Supreme Court judgment in Kranti Associates (P) Ltd. v. Masood Ahmed Khan, the Court reiterated that recording of reasons is indispensable for judicial and quasi-judicial decisions to ensure fairness, transparency, and prevent arbitrary exercise of power. The reasoning provided in the Supreme Court judgment highlighted that non-speaking orders are a violation of natural justice and hinder judicial review. Consequently, the Court set aside the impugned order and remitted the matter back to the respondent. The respondent was directed to redo the assessment after affording a reasonable opportunity to the petitioner and to pass a speaking order within four months from the date of receipt of a copy of the order.

Facts

The petitioner, Tvl.Vanitha Fireworks Industries, filed a writ petition challenging an order dated 05.07.2021 passed by the Assistant Commissioner (ST)-III, Sivakasi. The petitioner contended that the impugned order was passed without addressing their objections dated 09.11.2020. A notice dated 04.03.2021 had been issued proposing to reverse Input Tax Credit (ITC) and levy penalty under Section 27(4) of the Tamil Nadu Value Added Tax Act, 2006. The petitioner submitted objections to the proposed reversal of ITC and made submissions regarding the penalty. However, the impugned order merely stated that the dealer's reply was not accepted and a further notice was issued, without providing any specific reasons or dealing with the petitioner's objections.

Key Issues

1. Whether the impugned order dated 05.07.2021, passed by the Respondent, is vitiated for violation of the principles of natural justice due to non-speaking nature and failure to deal with the petitioner's objections? Petitioner's Contention: The learned counsel for the petitioner argued that the impugned order is bad for violation of the principles of natural justice as it is a non-speaking order and does not provide any reasons for rejecting the petitioner's objections dated 09.11.2020. They relied on the Supreme Court judgment in Kranti Associates (P) Ltd. v. Masood Ahmed Khan, which emphasized the necessity of recording reasons in quasi-judicial decisions to ensure fairness, transparency, and prevent arbitrary exercise of power. The petitioner asserted that the order merely recorded that the reply was not accepted without any substantiation. Respondent's Contention: The judgment does not record any specific arguments or contentions made by the respondent.