Order — Reasons — Failure to give reasons amounted to denial of justice — Karnataka Sales Tax, 1957

The petitioner, an Internet service operator extending services of broadband, web hosting, etc., provided a CD-ROM to its customers in order to access the services and recovered service charges from them. The assessment order passed on the petitioner under the Karnataka Sales Tax Act, 1957, was challenged in appeal before the Appellate Authority who dismissed the appeal. The proceedings were remitted to the Assessing Officer by the Appellate Tribunal. The Assessing Authority rejected the contention of the petitioner that the internet services did not involve sale of CD-ROM and that the services were subjected to service tax and passed orders of assessments. The said order was challenged in writ petition before the High Court.

The Court observed that the orders impugned ex facie animate non-application of mind, as the Assessing Officer without adverting to the contentions advanced by the petitioner in the objections and recording findings over the same, held the objections untenable. Application of mind means consideration of the contentions advanced by the parties with reference to proved facts and the law applicable to the said facts. It is for the AO to consider all relevant material and eschew irrelevant material to record findings, and conclusions. Recording of reasons is a part of fair procedure. Reasons are harbinger between the mind of the maker of the decision in the controversy and the decision or conclusion arrived at. They substitute subjectivity with objectivity.

Giving of reasons in support of their conclusion by judicial and quasi-judicial authorities when exercising initial jurisdiction is essential for various reasons. First, it is calculated to prevent unconscious or arbitrariness in reaching the conclusions. The very search for reasons will put the authority on the alert and minimise the chances of unconscious infiltration of personal bias or unfariness in the concusion. It is part of fair procedure and failure to give reasons amounted to denial of justice.