The necessity of providing reasons in appellate decisions is crucial for ensuring judicial accountability, transparency, and fairness.

ORDER :

1. Sri T.S. Murthy, learned counsel for the petitioner; Sri Swaroop Oorilla, learned Special Government Pleader for State Tax, for respondent Nos.1 to 4 and Sri Dominic Fernandes, learned Senior Standing Counsel for CBIC, for respondent No.5.

2. The appellate order dated 17.08.2024 is subject matter of challenge in this petition.

3. The singular ground raised by learned counsel for the petitioner is that against the basic order, the petitioner preferred a statutory appeal which is running in almost seven pages.

4. The petitioner has mentioned the facts and grounds, on the strength of which, said statutory appeal was preferred. However, the “discussion and findings” paragraph of the impugned appellate order shows that there is no iota of discussion about the grounds raised by the petitioner in its appeal memo. In absence of reasons, the consideration was an empty formality and therefore, the impugned appellate order may be set aside and the appellate authority may be directed to rehear the petitioner and pass a fresh order.

5. Learned Special Government Pleader for State Tax raised formal objection.

6. We have examined the “discussion and findings” given by the appellate authority and we find substance in the argument of learned counsel for the petitioner that the grounds raised by the petitioner in its appeal memo have not been considered by the appellate authority.

7. The Apex Court in Kranti Associates (P) Ltd. v. Masood Ahmed Khan, (2010) 9 SCC 496 opined that the reasons are heartbeat of conclusions. In administrative, quasi-judicial and judicial orders, the reasons must be given. The relative portion reads thus:

“12. The necessity of giving reason by a body or authority in support of its decision came up for consideration before this Court in several cases. Initially this Court recognised 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 this Court in A.K. Kraipak v. Union of India, (1969) 2 SCC 262.

13........

14. The expression “speaking order” was first coined by Lord Chancellor Earl Cairns in a rather strange context. The Lord Chancellor, while explaining the ambit of the writ of certiorari, referred to orders with errors on the face of the record and pointed out that an order with errors on its face, is a speaking order.

15. This Court always opined that the face of an order passed by a quasi-judicial authority or even an administrative authority affecting the rights of parties, must speak. It must not be like the “inscrutable face of a sphinx”.

47. Summarising the above discussion, this Court holds:

(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 super