ORAL ORDER

(PER : HONOURABLE MRS. JUSTICE MAUNA M. BHATT)

1. Rule. Mr. Trupesh Kathiriya, learned AGP waives service of notice of rule on behalf of all respondents.

2. Controversy involved in the present petition lies in a very narrow compass. Considering the controversy involved and with the consent of the learned advocates for the respective parties, the present petition is taken up for final hearing today.

3. By this petition under Article 226 of the Constitution of India, the petitioner has challenged the show cause notice dated 28.2.2022 for cancellation of registration, as also the order dated 26.4.2022, rejecting the application of the petitioner for revocation of cancellation of registration and an appeal order dated 12.10.2022 by the Goods and Service Tax (GST) authority whereby the GST number of the petitioner is cancelled with retrospective effect.

4. The facts stated briefly are that the petitioner is into the business of buying and selling of scrap materials since last 10 years and operates under the name and brand of M.M. Scrap Trading. The petitioner had obtained a valid GST number in the name of M.M.Scrap Trading on 11.2.2020. It is case of the petitioner that since issuance of certificate, it has been duly filing its returns and has been duly reporting the business returns to the concerned authorities in accordance with law. It is the case of the petitioner that despite following the mandate under the law, it received a show cause notice for cancellation of registration dated 28.2.2022. Immediately, a reply to the show cause notice was filed stating necessary facts. Despite that, without considering any of the averments made in the reply, an order dated 9.3.2022 came to be passed by the authority cancelling the registration number of the petitioner. The petitioner also preferred an application for revocation of cancellation of registration number, however, the same was rejected vide order dated 26.4.2022. Against the order dated 26.4.2022, the petitioner preferred appeal before the competent authority vide appeal dated 17.5.2022 and the competent authority also vide order dated 12.10.2022 rejected the same. Aggrieved by the afore-stated actions of the respondents, the present petition is filed.

5. Heard Mr. Digant Popat, learned advocate for the petitioner. Inviting attention of this Court to the show cause notice dated 28.2.2022, he submitted that, the same is bereft of any reasons. Further, without considering the reply given by the petitioner to the show cause notice, an order dated 9.3.2022 was passed cancelling the registration. Even the application preferred by the petitioner seeking revocation was rejected vide order dated 26.4.2022 that too without assigning any reasons. He further submitted that as the petitioner’s business was hampered, he immediately filed appeal before the competent authority dated 17.5.2022 enclosing all the evidences in relation to the genuineness of his business. The GST credit received by the petitioner was also shown in the appeal filed, despite that without assigning any reasons, merely on the opinion of Assistant Commissioner, Ghatak 88, Rajkot, the competent authority decided not to restore the registration and rejected the appeal filed by the petitioner. Relying upon the decision of Coordinate Bench in case of Aggarwal Dyeing and Printing Works vs. State of Gujarat [2022] 332 (Gujarat), he submitted that considering the violation of principles of natural justice, similar issue has been decided by this court in favour of the petitioner.

6. On the other hand, Mr. Trupesh C. Kathiriya, learned AGP submitted that the reply filed by the petitioner has been considered by respondent No.3 and, therefore, no interference is warranted by this Court. However, he could not controvert the fact that the show cause notice as also the order rejecting the application of the petitioner seeking revocation of registration does not contain any reasons.

7. Having heard the Ld. Advocates for the respective parties, in the opinion of this Court, it is a settled legal position of law that reasons are heart and soul of the order and noncommunication of the same itself amounts to denial of reasonable opportunity of hearing, resulting in miscarriage of justice. More so, in this case even the appeal order also does not reflect application of mind by the competent authority.

8. In the decision of Aggarwal Dyeing and Printing Works (supra) this Court after considering the scheme of Act as well as the procedure contemplated under the provisions of the Act for cancellation of registration has held as under:

“10. Thus, upon appreciation of the scheme of Act, where specific forms have been prescribed at each stage right from registration, cancellation and revocation of cancellation of registration, the same are to be strictly adhered too. At the same time, it is equally important that the Proper Officer empowered under the said Act adheres to the principles of natural justice.

11. At the outset, we notice that it is settled legal position of law that reasons are heart and soul of the order and non communication of same itself amounts to denial of reasonable opportunity of hearing, resulting in miscarriage of justice. This Court is bound by the said judgments hereinafter referred to. The necessity of giving reason by a body or authority in support of its decision came for consideration before the Supreme Court in several cases. Initially, the Supreme Court recognized a sort of demarcation between administrative orders and quasi-judicial orders but with the passage of time the distinction between the two got blurred and thinned out and virtually reached a vanishing point in the judgment of the supreme Court in A.K. Kraipak v. Union of India [1970] 1 SCR 457. The Hon’ble Supreme Court vide judgments in the cases of Ravi Yashwant Bhoir v. District Collector, Raigad [2012] 4 SCC 407, Sant Lal Gupta v. Modern Cooperative Group Housing Society Ltd. [2010] 13 SCC 336; Kranti Associates (P) Ltd. vs. Masood Ahmed Khan [2010] 9 SCC 496; Abdul Ghaffar vs. State of Bihar [2008] 3 SCC 258, has expanded the horizon of natural justice and reasons have been treated part of the natural justice. It has gone to the extent in holding that reasons are heart and soul of the order. The absence of reasons renders an order indefensible/unsustainable particularly when it is subject to appeal/revision. It is to be noted that in the case of Kranti Associates (P) Ltd. (supra), the Hon’ble Supreme Court after considering various judgments formulated certain principles which are set out below:

“a. In India the judicial trend has always been to record reasons, even in administrative decisions, if such decisions affect anyone prejudicially.

b. A quasi-judicial authority must record reasons in support of its conclusions.

c. Insistence on recording of reasons is meant to serve the wider principle of justice that justice must not only be done it must also appear to be done as well.

d. Recording of reasons also operates as a valid restraint on any possible arbitrary exercise of judicial and quasi-judicial or even administrative power.

e. Reasons reassure that discretion has been exercised by the decision maker on relevant grounds and by disregarding extraneous considerations.

f. Reasons have virtually become as indispensable a component of a decision making process as observing principles of natural justice by judicial, quasi-judicial and even by administrative bodies.

g. Reasons facilitate the process of judicial review by superior Courts.

h. The ongoing judicial trend in all countries committed to rule of law and constitutional governance is in favour of reasoned decisions based on relevant facts. This is virtually the life blood of judicial decision making justifying the principle that reason is the soul of justice.

i. Judicial or even quasi-judicial opinions these days can be as different as the judges and authorities who deliver them. All these decisions serve one common purpose which is to demonstrate by reason that the relevant factors have been objectively considered. This is important for sustaining the litigants’ faith in the justice delivery system.

j. Insistence on reason is a requirement for both judicial accountability and transparency.

k. If a judge or a quasi-judicial authority is not candid enough about his/her decision making process then it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles of incrementalism.

l. Reasons in support of decisions must be cogent, clear and succinct. A pretence of reasons or ‘rubber-stamp reasons’ is not to be equated with a valid decision making process.

m. It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decision making not only makes the judges and decision makers less prone to errors but also makes them subject to broader scrutiny.

n. Since the requirement to record reasons emanates from the broad doctrine of fairness in decision making the said requirement is now virtually a component to human rights and was considered part of Strasbourg Jurisprudence. See (1994) 19 EHRR 553 at 562 para 29 and Anya v. University of Oxford, 2001 EWCA Civ 405, wherein the Court referred to Article 6 of European Convention of Human Rights which requires, “adequate and intelligent reasons must be given for judicial decisions.”

o. In all common law jurisdictions judgment play a vital role in setting up precedents for the future. Therefore, for development of law, requirement of giving reasons for the decision is of the essence and is virtually a part of “Due Process”. Thus, the position of law that emerges from the decisions mentioned above, is that assignment of reasons is imperative in nature and the speaking order doctrine mandates assigning the reasons which is the heart and soul of the decision and said reasons must be the result of independent re-appreciation of evidence adduced and documents produced in the case.

12. At this stage, it would be germane to refer to observations made by the Andhra Pradesh High Court in the case of MRF Mazdoor Sangh v. Commissioner of Labour 2014 (3) ALT 265, wherein the matter of cancellation of registration of trade union, it was held that:

“The show cause notice should reflect the jurisdictional facts based on which the final order is proposed to be passed. The person proceeded against would then have an opportunity to show cause that the authority had erroneously assumed existence of a jurisdictional fact and, since the essential jurisdictional facts do not exist, the authority does not have jurisdiction to decide the other issues.”

9. Applying the same principles particularly on the ground that the show cause notice as well as the order rejecting application seeking revocation of cancellation is without assigning any reasons and thereby there is a clear violation of principles of natural justice, the writ petition is allowed. We quash and set aside the show cause notice dated 28.2.2022 and consequential order dated 9.3.2022 as also the order rejecting the application of the petitioner seeking revocation dated 26.4.2022 and appeal order dated 12.10.2022, with liberty to respondent No.2 to issue fresh notice with particulars of reasons incorporated with details and thereafter to provide reasonable opportunity of hearing to the petitioner and to pass appropriate speaking order on merits.

10. It is needless to mention that it shall be open for the petitioner to respond to such notice by filing objection/reply with necessary documents, if relied upon. We clarify that we have not entered into the merits of the matter. No order as to costs.