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CST & VAT / GST | HEADLINES | TOP STORIES

‘Stop issuing Non-Speaking Orders which leads to Unnecessary Litigations’: Madras HC to VAT Officials [Read Judgment]

April 4, 2020 5:21 pm| By : Mariya Paliwala 

The Madras High Court has urged the officials of the commercial tax departmentnot to pass non-speaking orders so as to curb the unnecessary litigations.

The decision was delivered by a division bench of the Court while hearing a petition filed by M/s. Shyam Textiles Limited, wherein the Court set aside a non-speaking order passed by the official of commercial tax as no reason was clarified in it, and directed the official for the fresh assessment order to be passed.

The petitioner-Company had imported 30000 Yard of Polyester Knitted Pile Fabric Fourway. The goods in question being declared goods could not be taxed at the rate of 16% as per the clarification issued by the Commissioner under Section 28A of the Tamil Nadu General Sales Tax (TNGST) Act, 1959. Relying on the same, the petitioner submitted that the Assessment Order deserves to be quashed by the exercise of writ jurisdiction of this Court and the entry 22A itself deserves to be declared ultra vires under Section 14(vii) of the CST Act, 1956.

The assessee further contended that the commissioner in his order did not state any reasons for determining the rate of interest on the commodity under Section 28A of the  Tamil Nadu General Sales Tax(TNGST) Act, 1959.

The division bench consisting of Justice Vineet Kothari and Justice R. Suresh Kumarset aside the non-speaking order passed by the official of commercial tax as no reason was clarified in it, and directed the official for the fresh assessment order to be passed.

The bench, while disposing of the petition, observed that non-speaking orders passed Commissioners without appreciating the responsibility which lies upon them to pass well-reasoned quasi-judicial orders. Under these powers, such non-speaking orders result in unnecessary litigation in the Constitutional Courts, it said.

“Some such other non-speaking orders passed by the Commissioner in the exercise of Section 28A of the Old TNGSTAct, 1959 and Section 48A of the TNVATAct, 2006 have come on our notice quite often and some kind of non-speaking orders are passed by the learned Commissioners without appreciating the responsibility which lies upon them to pass well-reasoned quasi-judicial orders. Under these powers, such non-speaking orders result in unnecessary litigation in the Constitutional Courts and there seems to be no check on such casual exercise of powers by the responsible officers of theCommercial Taxes Department. We only wish to bring it to the notice of the Senior Officers of the Department was that they realize their duty and responsibility in passing appropriate reasoned orders in such cases,” the Court said.To Read the full text of the Judgment