Explore the significance of speaking orders under the GST regime. Learn how reasoned decisions uphold natural justice, serving as a pillar for accountability, transparency, and fair decision-making. Dive into notable cases and the object of speaking orders for a comprehensive understanding.

Speaking orders, or reasoned decisions, form an integral part of natural justice and serve as the third pillar of this principle. A speaking order refers to a decision that contains its own reasons and explanations. When an adjudicating body provides the rationale behind their decision, it is considered a speaking order. This type of order is crucial for judicial review, as it enables the party or parties involved to understand the grounds on which a decision has been made against them. While speaking orders have been recognized in India and the USA, they are yet to be fully acknowledged under English law.

Recording reasons to support a decision made by a quasi-judicial authority in a disputed claim ensures that the decision is based on legal principles rather than personal whims or policy considerations. The purpose of recording reasons is to uphold the principle that justice must not only be done but must also appear to be done. By providing reasons, the decision-maker demonstrates that they have exercised their discretion based on relevant factors and without considering extraneous considerations.

Need of the Speaking Order

The need for speaking orders arises from several grounds:

i. Challenging Erroneous Orders: When a party aggrieved by a decision claims that the authority has erred, the recorded reasons become crucial evidence to assess the validity of the decision.

ii. Setting Precedents: Speaking orders serve as a deterrent in similar cases, as they establish a precedent and guide future decision-making.

iii. Facilitating Review: Parties and reviewing authorities require satisfaction regarding the grounds on which a decision has been made. In cases where an order is appealed, the appellate court must understand the reasoning behind the decision. Failure to record reasons diminishes the value of the decision and may lead to its deprecation.

Every action taken by the state or judiciary must adhere to the principle of non-arbitrariness. Thus, even in the absence of a statutory provision mandating the recording of reasons, it is imperative for reasons to be documented to ensure accountability and transparency.

GST Regime

Notable Cases Highlighting the Significance of Speaking Orders

1. State of W.B. v. Atul Krishna Shaw – AIR 1990 SC 2205: In this case, the Supreme Court emphasized that stating reasons is essential for justice. Reasoned decisions not only assure citizens that they are receiving justice but also serve as a disciplinary measure for the tribunal itself.

2. Satellite Engg. Ltd. v. Union of India – 1987(31) E.L.T. 356 (Bom.): The court held that a collector is obligated to provide a speaking order that demonstrates due consideration of all relevant aspects of the controversy. If the order fails to show such careful deliberation, it can be inferred that the decision-maker did not apply their mind appropriately. In such cases, the court may remand the matter for reconsideration.

Object of Speaking Order

Reasons are a fundamental requirement of the rule of law. They bridge the gap between facts and decisions, safeguard against non-application of mind and arbitrariness, and maintain public confidence in judicial and administrative authorities. Moreover, reasons ensure that justice is not only done but also appears to be done.

As observed by Lord Deenning in Breen v. Amalgamated Egg Union, the practice of providing reasons is essential for good administration. The requirement to record reasons promotes clarity, prevents arbitrariness, and satisfies the concerned parties.

In the present era, the previous concept of a “police state” has transformed into a “welfare state.” With this transformation, the role of the government has expanded, giving rise to administrative tribunals and other executive authorities. These authorities possess extensive discretionary powers, creating the potential for the abuse of such powers. In order to safeguard against the arbitrary exercise of authority by these entities, the requirement of recording reasons has been imposed upon them.


Speaking orders become obligatory when statutes explicitly mandate the recording of reasons. However, even in the absence of a specific requirement, the practice of documenting reasons remains a dutiful responsibility. Failure to disclose reasons in cases subject to appeal or revision deprives the party of their right to challenge the decision. It is essential to disclose reasons for judicial scrutiny, as withholding them solely to evade examination contradicts the purpose of a dispassionate review of executive orders. The law cannot permit the exercise of power to keep reasons undisclosed if the only reason is to avoid judicial scrutiny.

In summary, speaking orders are vital for upholding natural justice. They ensure accountability, transparency, and fairness in decision-making processes. By providing clear and reasoned justifications, speaking orders serve as a cornerstone of a robust and trustworthy legal system.


Author: Adv. Dinesh Verma | Adv. Sagar Verma

Disclaimer: Though all efforts have been made to reproduce the opinion correctly, the access and circulation is subject to the condition that I/we am/are not responsible/ liable for any loss or damage caused to anyone due to any mistake/error/omissions. Our comments are based on the provisions of GST legislation as on the date of this memo. Any variation in our understanding of the aforesaid could significantly alter our comments given in this note. The comments in this memo are purely a matter of interpretation and not binding on any regulatory or tax authorities. Therefore, there can be no assurance that the regulatory or tax authorities will not take a position contrary to our comments. Our opinions are provided for general informational purposes only and should not be considered as legal advice. The interpretation and application of the GST Act may vary based on individual circumstances and specific cases.

Author Bio

Join Taxguru’s Network for Latest updates on Income Tax, GST, Company Law, Corporate Laws and other related subjects.

Join us on Whatsapp

taxguru on whatsapp GROUP LINK

Join us on Telegram

taxguru on telegram GROUP LINK

Download our App


More Under Goods and Services Tax

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Posts by Date

February 2024