Reason Is the Heartbeat of Every Conclusion: Chhattisgarh HC Quashes Suo Motu GST Revision u/s 108 for Lack of Reasoning [Read Order]

The Court held that “reason is the heartbeat of every conclusion,” and an order passed without assigning reasons is lifeless and unsustainable in law.

M/s Agrawal Agro Centre, a proprietorship firm registered under the CGST Act, challenged the legality of a suo motu revision order dated 01.06.2019 passed by the State Tax Commissioner, which had stayed an appellate order favoring the petitioner.

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The Assistant Commissioner of State Tax intercepted a vehicle belonging to the petitioner on the suspicion that goods were transported twice using the same e-way bill and invoice. An order imposing tax and penalty was passed on May 22, 2019. The petitioner challenged the order in appeal under Section 107, which was allowed on May 30, 2019.

However, in an abrupt turn, the Commissioner stayed the appellate order and initiated suo motu revisional proceedings under Section 108 of the CGST Act via order dated June 1, 2019. This action was challenged before the High Court on two critical grounds: (1) lack of reasoning in the revisional order, and (2) absence of statutory authorization of the Commissioner to exercise revisional power on the said date.

The Court observed that no notification was issued under Section 99(2) read with Section 5 of the CGST Act to designate the revisional authority as of June 1, 2019 the date on which the impugned order was passed. The required notification was issued much later on August 7, 2020. As a result, the Commissioner was not legally empowered to exercise revisional jurisdiction at that time.

Justice Deepak Kumar Tiwari observed that the impugned order did not assign any reasons to justify the exercise of suo motu revisional power.

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The court, in its judgment noted that “no cogent reasons have been assigned for exercising power under Section 108 of the Act 2017 for suo motu revision. Section 108 of the Act 2017 empowers the Authority that if certain facts are not decided in appeal, the Authority may exercise its jurisdiction and in order to exercise such jurisdiction, the primary satisfaction should be recorded by the said Authority, as the order without reasons cannot be sustained. To give reasons is the rule of natural justice. The reason is the heartbeat of every conclusion and without the same it becomes lifeless.”

The Court held that such a cryptic order, passed without cogent justification or statutory authority, could not be sustained. Consequently, it quashed the order dated June 1, 2019, and directed the authorities to drop the ongoing revision proceedings.

However, the Court also clarified that if the law permits, the competent authority may initiate fresh revisional proceedings, provided a proper opportunity of hearing is afforded to the petitioner and such action must be taken within 15 days of the receipt of the Court’s order.

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