Delhi High Court held that the directions passed by the Dispute Resolution Panel (DRY), which is a quasi judicial body, should be well reasoned containing cogent and germane reasons and remanded back the non-speaking direction of the DRY for fresh adjudication.

Facts of the case

• The DRY passed non-speaking directions in case of the petitioner without assigning any cogent reason.

• Aggrieved by the said directions, the petitioner filed a writ of certiorari (See Note 1 below) seeking quashing of the directions of the DRY.

• The Revenue conceded before the High Court that the directions of DRY deserved to be quashed.

Decision of High Court

The High Court quashed the directions passed by the DRY and remanded back the matter to the DRY for fresh adjudication. The High Court observed that-

  • While dealing with a dispute/suit, it is obligatory for a quasi judicial authority to pass reasoned order/directions assigning cogent and germane reasons.
  • The reasons form the heart and soul of the order/directions.
  • A speaking order, containing proper reasons, facilitates appreciation of the order/ directions when the same is called in question before a superior forum.

Our Comments

Earlier, where a writ petition was filed in the case of Messe Dusseldorf India Pvt. Ltd.3, the Delhi High Court had expected hope that the DRP shall pass a speaking order after taking into consideration the objections filed and evidences furnished by the taxpayer.

The current ruling emphasises that it is obligatory for the DRP, holding a position of a qausi judicial authority, to pass speaking directions, comprising of logical and relevant reasons, since the reasons form essence and substance of any matter.

The recent developments also indicate that the non-speaking directions of the DRP have not been accepted by the judicial authorities.

Note:- 1. A writ of certiorari means an order by a higher court directing a lower court, tribunal, or public authority to send the record in a given case for review.

More Under Income Tax

Leave a Comment

Your email address will not be published.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

Search Posts by Date

September 2021