Allahabad High Court Sets Aside Non-Speaking Order Cancelling GST Registration, Says Reason Is 'Heart Beat' Of Every Conclusion

The Allahabad High Court has held that any order devoid of reasons will become lifeless as reasons are the heartbeat of every order.

“Reason is the heart beat of every conclusion. In the absence of reasons the order becomes lifeless. Non recording of reasons renders the order to be violative of principles of natural justice. Reasons ensures transparency and fairness in decision making. It enables litigant to know reasons for acceptance or rejection of his prayer. It is statutory requirement of natural justice. Reasons are really linchpin to administration of justice. It is link between the mind of the decision taker and the controversy in question. Thus failure to give reasons amounts to denial of justice,” held Justice Piyush Agrawal.

The case of the petitioner was that its GST registration was cancelled by a non-speaking order. Thereafter, petitioner preferred an appeal which was also dismissed without providing any cogent reasoning. It was contended that no date and time was mentioned in the show cause notice purporting cancellation of GST registration of the petitioner for appearing before the authority concerned under Section 29 (2) of the GST Act .

Placing reliance on the decision of the Supreme Court in The Secretary & Curator, Victoria Memorial v. Howrah Ganatantrik Nagrik Samity and ors., the Court held that an order without valid reasons cannot be sustained.

The Court observed that reasons are what culminate into a final decision. Reasons for coming to a particular conclusion are looked at by higher courts while adjudicating upon the legality of a particular order. Accordingly, the Court held that every litigant, on either side, before the Court is entitled to reasons for acceptance or rejection of the prayers made so as to make the remedy of appeal before other or higher forums meaningful.

“It is a settled canon of legal jurisprudence that the Courts/Authorities are vested with discretionary powers but such powers are to be exercised judiciously, equitably and in consonance with the settled principles of law. Whether or not, such judicial discretion has been exercised in accordance with the accepted norms, can only be reflected by the reasons recorded in the order impugned before the higher Court. Often it is said that absence of reasoning may ipso facto indicate whimsical exercise of judicial discretion.”

The Court remitted the matter back to the first appellate authority to pass a fresh speaking and reasoned order in accordance with law.

Case Title: M/S Namo Narayan Singh vs. State Of U.P. And 2 Others [WRIT TAX No. - 1476 of 2022]

Case Citation: 2023 LiveLaw (AB) 380

Click Here To Read/Download Order