Judgment :- 1. The petitioner is one and the same in both the writ petitions. In W.P.No.7747 of 2004, the petitioner challenges the provisional assessment order dated 18.2.2004 passed by the Commercial Tax Officer, Adyar-I Assessment Circle, Chennai. The petitioner is an importer of Superior Kerosene Oil ("SKO" in short) and the supplier to various industries. The petitioner is a registered dealer under the Tamil Nadu General Sales Tax Act, 1959 ("State Act" in short) and Central Sales Tax Act, 1956 ("Central Act" in short) on the file of the first respondent. 2. The issue in these writ petitions relates to the assessment year 2003-2004 and the period involved is from April, 2003 to October, 2003. On 14.11.2003, the officers of the first respondent-Department caused inspection of the business branch premises at Coimbatore and the petitioner furnished statements for the period from April, 2003 to October, 2003 relating to the sale of SKO. According to the petitioner, the entire consignment imported and sold to various parties in Tamil Nadu is an inter-State sale covered by 'C' forms and therefore there is no element of local sales. 3. On the contrary, the first respondent took the stand that the sale had occasioned inside the State of Tamil Nadu and it is not a case of inter-State sale. In support of the same, the first respondent issued a notice dated 14.1.2004 in TNGST No.0861669/2003-04 and the petitioner-dealer filed their objections on 10.2.2004. In the notice dated 14.1.2004, the following were the charges:- "1. From the above, it is seen that the consumers in and around Coimbatore placed orders addressed to the dealers Chennai office and in most of the cases with advance payment by D.D. and in turn they were forwarded to the dealers Coimbatore Depot to monitor the delivery of SKO to the ultimate buyers. Both these orders and demand drafts have finally been handed over to the dealers Coimbatore Depot. Certain purchase orders do not contain the place where from the goods should be supplied. In some cases, there is provision for CST 4% but this will not be the deciding factor for inter-State sale. In some cases both the place and CST 4% were absent. Although in some of the cases, it has been noted that the goods from Cochin it cannot be determinative test to call it as in the course of inter-State purchase. In some cases both the place and CST 4% were absent. Although in some of the cases, it has been noted that the goods from Cochin it cannot be determinative test to call it as in the course of inter-State purchase. To put it in simple words, the buyer at Coimbatore is concerned with the delivery of SKO at their premises and not concerned whether it comes from Cochin or Coimbatore. 2. Further all the consignments first reached Coimbatore Depot and then only started its journey to the buyers destination. Hence it is clear that the Coimbatore Depot took full custody of the goods before it is delivered to the buyers. 3. Unidentified goods, part of a specific whole such as 100 tons out of 1000 tons held in stock. 4. SKO at Cochin terminals is stored in big storage tanks of more volume and 12 KL is very minimal, which cannot be identified, at the time of contract of sale. Hence it falls under category (iii) supra. When the unascertained goods move from one State to another and they are ascertained for a particular contract of sale only after they are received at the destination, the sale will not come under Sec.3 but will only amount to a local sale at the destination (vide Kelvinator of India Vs. State of Haryana, 32 STC 629 SC, Cement Distributors Vs. DCTO, 23 STC 86 Madras affirmed in (1975) 36 STC 389 (SC). 5. As in the instant case, the SKO being an unascertained goods, is appropriated in Tamil Nadu for the orders placed with the Coimbatore Depot, it is only a local sale according to Sec.4(2)(b) of the CST Act, 1956 read with the explanation 3(a)(ii) to Sec.2 (n) of the TNGST Act, 1959. This will be the case in respect of other Depots and Chennai office. Therefore the monthly returns filed by them in Form A1 from April 2003 to October 2003 are incorrect and incomplete. This will be the case in respect of other Depots and Chennai office. Therefore the monthly returns filed by them in Form A1 from April 2003 to October 2003 are incorrect and incomplete. It is therefore proposed to reject the returns from April 2003 to October 2003 under Rule 18(4) of the TNGST Rules to determine provisionally the taxable turnover upto October 2003 as follows:- Taxable turnover reported Rs.3,01,53,468-00 Local sales camouflaged as inter- State sales Rs.3,62,90,160-00 Taxable turnover proposed upto Rs.6,64,43,628-00 at 25% October2003 As they have willingly suppressed the local sales by camouflaging it as an inter-State sales maximum penalty under Sec.12(3)(b) of the Act at 150% is proposed on the tax due on the suppressed turnover of Rs.3,62,90,160-00. The dealer are requested to file their objections if any to the above proposals with connected records in support of their contention within 15 days of receipt of this notice failing which the proposals will be confirmed and orders and demand notices issued accordingly." 4. In the reply dated 10.2.2004, while reiterating the stand that it was a case of inter-State sale of SKO from Cochin to various purchasers in Tamil Nadu, the petitioner relied upon various documents like the purchase orders, central excise documents to show the proof of despatch of goods from Cochin to the purchasers in Tamil Nadu and the documents were annexed to the reply dated 10.2.2004. The petitioner also relied upon a Certificate issued by the Assistant Commissioner (Assessment), Special Circle-II, Commercial Taxes, Ernakulam dated 27.1.2004 in support of the plea that the goods in question viz., SKO had already suffered 4% central sales tax at Kerala and therefore the first respondent's claim of local sales is far-fetched. The petitioner had taken pains to enclose all the documents submitted to the authority, as part of the typed-set of papers, and after taking note of the detailed objections and after extracting the entire objections including the case laws relied upon, the Commercial Tax Officer has passed the impugned provisional assessment order overruling the objections and provisionally assessing the total and taxable turnover for the period from 1.4.2003 to 31.10.2003 and thereafter demanding tax and penalty. The said order is under challenge in W.P.No.7747 of 2004. 5. Heard the learned counsel for the petitioner and the learned Government Advocate (Taxes) for the first respondent. 6. The said order is under challenge in W.P.No.7747 of 2004. 5. Heard the learned counsel for the petitioner and the learned Government Advocate (Taxes) for the first respondent. 6. To cut short the entire issue which is before the Court, the last paragraph which gives reasons for passing the provisional assessment order is extracted hereunder, to question what prevailed upon the authority to pass the impugned provisional assessment order. "I have carefully examined their objections and the copies of records enclosed. It is found that in all cases, there is no evidence to show that covenant to the contract entered into by the Madras office with the purchasers, the goods moved from other States. There is no evidence to show that the purchase orders were transmitted to the Cochin branch. All these records have been camouflaged to show that these are inter-State sales from Cochin. But the goods have been received by the Coimbatore branch taken to stock and then only delivered to the customers in Tamil Nadu. Only to avoid local tax this has been done. In the circumstances, the decisions relied on by the dealers are not applicable to this case. The Central Sales Tax paid in other State will not alter the nature of transactions, which is a local sale in Tamil Nadu. As they have willingly suppressed the local sales, levy of penalty is also justified. I therefore over rule their objections and provisionally assess the total and taxable turnover for the period from 01.04.2003 to 31.10.2003, as follows, under the TNGST Act, 1959. ........" 7. A reading of the above clearly shows that the order suffers from total non-application of mind as well as non-consideration of the documents and records produced by the petitioner. The authority states that she had examined the objections and copies of records and therefore the production of records is not in dispute. If the records were taken for consideration, it is not clear as to how the authority can state that no evidence was filed to show the movement of goods from other States to the local purchasers based on the covenant. This statement appears to be a fallacy, as the purchase orders had already been produced showing the origin of goods from Cochin to the purchaser at the State of Tamil Nadu. This statement appears to be a fallacy, as the purchase orders had already been produced showing the origin of goods from Cochin to the purchaser at the State of Tamil Nadu. The next reason is that there was no evidence to show that the purchase orders were transmitted to the Cochin branch. For this, the petitioner has submitted the central excise records to show the delivery of goods after import and the payment of central sales tax at 4% supported by the certificate issued by the Assistant Commissioner (Assessment), Special Circle-II, Commercial Taxes Department, Ernakulam. Those records have not been taken into consideration by the authority. 8. The next finding of the authority is even more unreasonable, that is to say that the records have been camouflaged to show that they were inter-State sales from Cochin. With great reservation, the Court would observe that the authority has not taken pains to state as to which document has been camouflaged and in what manner to show the inter-State sales from Cochin. A finding of this nature, serious enough to allege, should be based on analysis of documents and not merely on conjectures and surmises. There is no analysis of the admitted documents to show that they have been camouflaged in one or other manner. Therefore, the said statement of camouflage appears to be a figment of imagination by the authority. The next finding is that the goods had been received by the Coimbatore branch, taken to stock and then delivered to customers in Tamil Nadu and this was done only to avoid the local tax. The plea of the petitioner is that neither there is any evidence nor has the officer relied upon any material document. It is, therefore, clear that all these allegations are mere conjectures and surmises on the part of the authority, without analysing the documents produced by the petitioner and what makes the matter worse is that, there are no reasons recorded as to which of the documents are invalid under law and which of the documents have been camouflaged to show the inter-State sales and how those documents are inadmissible in law. The original authority, namely, the Commercial Tax Officer cannot give a finding against an assessee on mere ipse dixit, as has been done in the present case. All the documents referred to by the petitioner have been brushed aside by stating as not applicable. The original authority, namely, the Commercial Tax Officer cannot give a finding against an assessee on mere ipse dixit, as has been done in the present case. All the documents referred to by the petitioner have been brushed aside by stating as not applicable. It is also surprising to note that the officer has merely brushed aside the central sales tax paid in other State by stating that it does not alter the transaction, namely, local sales in Tamil Nadu. Unless and until it is shown by material document as to which document established the case of local sales, the authority cannot unilaterally come to the conclusion that the sale in this case was local sales exigible to tax under the provisions of the State Act. The question of suppression, which is also the reason for levy of penalty, appears to be unsupported by any material. On the whole, the entire order, which runs to about seven pages, contains only the extract of the notice and the reply upto six pages and the last paragraph of the seventh page only deals with the record of findings by the authority, which apparently do not contain any reasons. It is well established principle in law that the administrative authority exercising judicial or quasi-judicial functions is required to record the reasons for its decision. In S.N.Mukherjee v. Union of India, AIR 1990 SC 1984 , the Hon'ble Supreme Court held in paragraphs 35, 38 and 39 as follows:- "35. Reasons, when recorded by an administrative authority in an order passed by it while exercising quasi-judicial functions, would no doubt facilitate the exercise of its jurisdiction by the appellate or supervisory authority. But the other considerations, referred to above, which have also weighed with this Court in holding that an administrative authority must record reasons for its decision are of no less significance. These considerations show that the recording of reasons by an administrative authority serves a salutary purpose, namely, it excludes chances of arbitrariness and ensures a degree of fairness in the process of decisions-making. The said purpose would apply equally to all decisions and its application cannot be confined to decisions which are subject to appeal, revision or judicial review. These considerations show that the recording of reasons by an administrative authority serves a salutary purpose, namely, it excludes chances of arbitrariness and ensures a degree of fairness in the process of decisions-making. The said purpose would apply equally to all decisions and its application cannot be confined to decisions which are subject to appeal, revision or judicial review. In our opinion, therefore, the requirement that reasons be recorded should govern the decisions of an administrative authority exercising quasi-judicial functions irrespective of the fact whether the decision is subject to appeal, revision or judicial review. It may, however, be added that it is not required that the reasons should be as elaborate as in the decision of a Court of law. The extent and nature of the reasons would depend on particular facts and circumstances. What is necessary is that the reasons are clear and explicit so as to indicate that the authority has given due consideration to the points in controversy. The need for recording of reasons is greater in a case where the order is passed at the original stage. The appellate or revisional authority, if it affirms such an order, need not give separate reasons if the appellate or revisional authority agrees with the reasons contained in the order under challenge. 38. The object underlying the rules of natural justice "is to prevent miscarriage of justice" and secure "fair play in action". As pointed out earlier the requirement about recording of reasons for its decision by an administrative authority exercising quasi-judicial functions achieves this object by excluding chances of arbitrariness and ensuring a degree of fairness in the process of decision-making. Keeping in view the expanding horizon of the principles of natural justice, we are of the opinion, that the requirement to record reason can be regarded as one of the principles of natural justice which govern exercise of power by administrative authorities. The rules of natural justice are not embodied rules. The extent of their application depends upon the particular statutory framework whereunder jurisdiction has been conferred on the administrative authority. The rules of natural justice are not embodied rules. The extent of their application depends upon the particular statutory framework whereunder jurisdiction has been conferred on the administrative authority. With regard to the exercise of a particular power by an administrative authority including exercise of judicial or quasi-judicial functions the legislature, while conferring the said power, may feel that it would not be in the larger public interest that the reasons for the order passed by the administrative authority be recorded in the order and be communicated to the aggrieved party and it may dispense with such a requirement. It may do so by making an express provision to that effect as those contained in the Administrative Procedure Act, 1946 of U.S.A. and the Administrative Decisions (Judicial Review) Act, 1977 of Australia whereby the orders passed by certain specified authorities are excluded from the ambit of the enactment. Such an exclusion can also arise by necessary implication from the nature of the subject matter, the scheme and the provisions of the enactment. The public interest underlying such a provision would outweigh the salutary purpose served by the requirement to record the reasons. The said requirement cannot, therefore, be insisted upon in such a case. 39. For the reasons aforesaid, it must be concluded that except in cases where the requirement has been dispensed with expressly or by necessary implication, an administrative authority exercising judicial or quasi-judicial functions is required to record the reasons for its decision." 9. In the light of the above, this Court has no hesitation to hold that the first respondent-Commercial Tax Officer has passed a non-speaking order, bereft of reasons, without application of mind to the records produced. The entire findings are in the realm of conjectures and surmises and, therefore, the petitioner was justified in approaching this Court to interfere with the same. 10. Though a counter affidavit is filed, it does not further the case of the first respondent, as it is only the reiteration of the order and in any event, as has been held by the Apex Court in Mohinder Singh Gill and another v. The Chief Election Commissioner, New Delhi and others AIR 1978 SC 851 , the counter affidavit cannot improve the case of the department when the order does not speak for itself. Para 8 of the decision in AIR 1978 SC 851 reads as follows:- "8. Para 8 of the decision in AIR 1978 SC 851 reads as follows:- "8. The second equally relevant matter is that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, get validated by additional grounds later brought out. We may here draw attention to the observations of Bose, J., in Gordhandas Bhani ( AIR 1952 SC 16 ) (at p.18): "Public orders publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the acting and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself". Orders are not like old wine becoming better as they grow older." 11. For all the above reasons, the impugned order is set aside and the matter is remitted to the first respondent-authority for re-consideration of the entire issue and the first respondent is directed to pass a reasoned order on merits after affording opportunity to the petitioner. W.P.No.7747 of 2004 is allowed by way of remand. Consequently, W.P.M.P.No.9191 of 2004 is closed. 12. In view of the order passed in W.P.No.7747 of 2004, no further direction is required to be issued in W.P.No.7748 of 2004. Accordingly, W.P.No.7748 of 2004 is closed. No costs.