FEBRUARY 11, 2026

Order Refusing to Speak

By Vijay Kumar

RAMNAYAN Yadav of Azamgarh received a Show Cause Notice (SCN) on 05.08.2024 from the Assistant Commissioner, CGST & Central Excise Division, Azamgarh as to why the following amounts should not be demanded and recovered:

(a) Short payment of GST - Rs. 47,01,682/-

(b) Excess availment of Input Tax Credit - Rs.27,56,828/-

(c) Wrong availment of Input Tax Credit - Rs.31,34,336/-

Penalty and interest were also proposed.

The taxpayer disputed the demand and furnished his reply on 19.08.2025.

By his order dated 18.12.2025, the learned Assistant Commissioner sustained the demand. In his 'Discussion And Findings', he solemnly stated:

I find that the submission of the noticee is not appropriate in respect of the impugned show cause notice. Further the noticee also failed to furnish all the supporting documents in respect of its reply dated 19.08.2025. Therefore, in my opinion the demand raised in the impugned show cause notice is sustainable.

The taxpayer is in writ petition before the Allahabad High Court against the order of the Assistant Commissioner. - 2026-TIOL-272-HC-ALL-GST

According to the taxpayer no opportunity of hearing was given.

The High Court, on perusal of the impugned order found that after taking note of the contents of the show-cause notice, reminders were sent to the noticee fixing date 17.12.2024, 23.12.2024 and 06.01.2025 for personal hearing. It has been observed that the last date for personal hearing fixed was 06.01.2025 and thereafter it has been observed that the written reply was furnished by the petitioner on 19.08.2025. What transpired between 06.01.2025 and 19.08.2025 is not clear. Materially, there is no narration in the impugned order that any notice for personal hearing was issued to the petitioner for any date beyond 19.08.2025, when it had first filed its reply to the show-cause notice.

The Court held:

From the narration contained in the impugned order, it is not clear if any opportunity of hearing was granted to the petitioner after 19.08.2025. To that extent, violation of principles of natural justice is made out.

The Court further observed,

More materially, if not shockingly after writing more than 30 pages of the order which contain nothing more than extract of the show-cause notice and the extract of the written reply dated 19.08.2025, under the heading 'Discussion And Findings', only this much has been observed

Discussion And Findings:- I have carefully gone through the records of the case, details and facts mentioned in the impugned show cause notice, noticee's submission in response to the notice and all other facts available on records. I find that the submission of the noticee is not appropriate in respect of the impugned show cause notice. Further the noticee also failed to furnish all the supporting documents in respect of its reply dated 19.08.2025. Therefore, in my opinion the demand raised in the impugned show cause notice is sustainable.

Thirty pages of extracts, one paragraph of "findings." A speaking order that refused to speak.

The Court noted:

1. Sri Braj Kishore Vidyarthi, Assistant Commissioner CGST & Central Excise Division-Azamgarh has failed to apply his mind to any part of the reply furnished by the petitioner.

2. He further appears to have failed to apply his mind to the demand proposed against the petitioner.

3. He has first recorded the contents of the show-cause notice and thereafter extracted the reply.

4. Without assigning any reason, he has confirmed the demand of tax and penalty.

5. The lack of application of mind is apparent on the face of record and requires no discussion by this Court.

6. By making wholly vague and generic observations that he had considered all material available on record or that submission of the noticee is not 'appropriate' or that the noticee has failed to furnish 'all supporting document in respect of its reply dated 19.08.2025', there is no consideration offered to the reply and there is no reasoning given to the fact contentions raised by the petitioner.

7. If the reply to the show-cause notice was lacking in any part, for which reason the explanation furnished by the petitioner was to be rejected it was incumbent on the adjudicating authority to discuss the same and record his reasons to draw that conclusion.

The High Court set aside the impugned order dated 18.12.2025 of the Assistant Commissioner and remitted the matter to the adjudicating authority to pass a fresh order after affording due opportunity of personal hearing to the petitioner. Prima facie, if the adjudicating authority is not convinced with the explanation furnished, it is expected that the petitioner would be given opportunity to explain the doubts that may exist with the adjudicating authority and cogent reasons would be recorded to reject the fact explanation furnished by the petitioner.

The High Court directed that a copy of this order be communicated to the Central Board of Indirect Taxes and Customs for necessary compliance to ensure all Adjudicating Authorities, comply with the minimal requirements of law with respect to grant of adequate opportunity to file reply, opportunity of personal hearing and, recording of reasons, to prevent frivolous litigation and frivolous demands being raised.

More than thirty years ago, the AP High Court in Sivashankar Granites Pvt. Limited v. Assistant Commissioner of Central Excise (1995) remarked,

it is high time that the Central Excise authorities wake up to the requirements of fair play as laid down by innumerable decisions of the Apex Court and observe the principles of natural justice in taking actions resulting in civil consequences, eschewing arbitrariness that is anathema to Article 14 of the Constitution.

The principles of natural justice are simple:

1. No man shall be a judge in his own case

2. Hear the other side

3. Give reasons for the decision.

That last principle is why speaking orders exist. An order must tell its own story-facts, findings, reasons-so that appellate forums are not left in the dark.

Instead, we get dumb orders: SCN repeated, reply reproduced, demand confirmed.

In simple terms a speaking order is an order that speaks for itself. The order should stand the test of legality, fairness and reason at all the higher appellate forums. That is the order should contain all the details of the issue, clear findings and a reasoned order. Such an order that speaks for itself is called a speaking order.

Now the courts have no hesitation in striking down an order, if it is not a speaking order.

Speaking Orders as a concept was not given much importance in India, in the early years of our independence, when the officialdom was not often questioned. (Perhaps then their actions were not much questionable also).

Why do well-experienced and highly paid adjudication officers fail in their basic responsibility?

A survey was conducted among mid-level officers in CBIC on the reasons for poor quality of adjudication.

Some of the answers: -

(i) Indifference in following the principles of natural justice;

(ii) Bureaucratic highhandedness;

(iii) Lack of professionalism and competence;

(iv) Lack of interest in adjudication;

(v) Tendency to dispose the case in favour of Revenue to save time and effort;

(vi) Frequent changes in the law and procedure and lack of knowledge. This is aggravated by frequent transfers;

(vii) Insufficient support staff;

(viii) Mask of vigilance fear is used to cover the above lacuna and shortcomings;

(ix) Pressure to liquidate pendency;

(x) Too much emphasis on quantity in disposal rather than on qualitative effort;

(xi) Culture in the Department not to invite trouble;

(xii) Premium attached to the pro Revenue image in the Department in assessing competence and suitability of officer for various assignments;

(xiii) Adjudication is not considered as the core function of duty;

(xiv) Vigilance proceedings are time consuming and better avoid them;

(xv) Wrath of reviewing officers who are also administrative bosses, who otherwise are supposed to encourage fair and judicious adjudication;

(xvi) Acceptance of orders is dragged and explanations are called from the adjudicators;

(xvii) Vigilance fear works on the adjudicator on account of the investigating agencies like DRI;

(xviii) One officer narrated how even refund claims were threatened with vigilance action if cleared positively;

(xix) Adjudicators do not care to do the original work but simply sign the drafts prepared by the supporting staff.

CESTAT former President Justice Raghuram once said,

This is compulsive evidence of a deep pathology in departmental adjudication. Two interpretations are possible - one that the judges are not able to understand the law as well as the commissioners are able to - one interpretation, which is comfortable for the departmental family……..If the pro-family interpretation is to be assumed as hallucinatory, then we are left with the inescapable conclusion that something is pathologically, terminally and seriously wrong with our departmental adjudication.

The pathology persists: dumb orders, deaf hearings, blind confirmations.

A taxpayer wrote to us:

Speaking order is a rare commodity these days. Most of the orders are dumb and the submissions during the personal hearing fall on deaf ears. Finally, the show cause notices are confirmed blindly resulting in senseless orders. The first few pages of the adjudication order, you find the show cause notice repeated, the next few pages contain the submissions in reply filed and finally the order confirming the allegations without any discussion of the points raised in reply.

This is exactly what our Assistant Commissioner did - why blame him?