The Allahabad High Court ruled that simply mentioning ‘Delay in Submission of Appeal’ is not sufficient for rejecting the GST ( Goods and Services Tax ) appeals. While quashing the order, it stated that ‘An order without valid reasons cannot be sustained’.
The bench of Justice Piyush Agrawal observed that “It is settled law that reason is the heartbeat of every conclusion. An order without valid reasons cannot be sustained. To give reasons is the rule of natural justice. One of the most important aspect for necessitating to record reason is that it substitutes subjectivity with objectivity. It is well settled that not only the judicial order, but also the administrative order must be supported by reasons recording in it.
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The petitioner, New Shanti Restaurant had filed a writ seeking to overturn the order dated 22.7.2024 issued by the Additional Commissioner, Grade-2, Appeal 1st State Excise, Prayagraj, and an earlier order from 8.6.2023 passed by the Assistant Commissioner, State Excise Division-3.
It was argued that the appeal, submitted electronically, was rejected without any explanation, and no formal order detailing the reasons was provided. Furthermore, no formal order detailing the reasons for the rejection was provided to the petitioner, who only received a notice indicating that the appeal had been denied.
The petitioner’s counsel argued that the rejection of the appeal without assigning reasons violated the principles of natural justice. The counsel stated that the petitioner had a right to understand the rationale behind the rejection, and the absence of any reasons made it impossible for the petitioner to challenge the decision or file a proper appeal.
Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here
On the other hand, the counsel for the respondent, Mr. Arvind Mishra, supported the impugned orders and argued that the appeal had been filed through the GST APL-01 form, with an acknowledgment issued on the GST portal.
The counsel maintained that once the appeal was submitted, if found unacceptable, it was rejected, and the reason for rejection could be downloaded from the official GST portal. In this case, the respondent contended that the appeal was rejected as time-barred, as it had been filed beyond the statutory limitation period. The respondent further argued that the rejection notice issued to the petitioner served as sufficient communication regarding the decision.
The Court found that the rejection order dated 22nd July 2024 failed to provide any specific reasons for the dismissal of the appeal. The bench emphasised that simply stating that the appeal was time-barred did not suffice as an explanation for the rejection.
Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here
It further observed that the appellate authority had failed to apply its mind to the matter and did not consider all the relevant facts before dismissing the appeal.
The High Court quoted the Supreme Court ruling in the cases of Assistant Commissioner, Commercial Tax Department, Works Contract & Leasing, Kota Vs. Shukla & Brothers, M/s Travancore Rayon Ltd. v. Union of India have observed that the administrative authority and the tribunal are obliged to give reasons, absence whereof would render the order liable to judicial chastisement.Once the reason has not been assigned by the competent authority for levying the penalty then on this ground alone, the impugned orders cannot be sustained.
Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here
Thus, the bench quashed both the impugned orders and directed the appellate authority to reconsider the matter. The Court instructed the authority to proceed afresh, provide a reasoned and speaking order, and give the petitioner an opportunity to be heard.
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