Judgment B.N. Mahapatra, J. In the present writ petition, challenge has been made to the order dated 14.5.2014 passed under Annexure-3 by which opposite party no. 3-Sales Tax Officer, Bhubaneswar II Circle, Bhubaneswar informed the petitioner that as per provisions under Section 60(1) of the OVAT Act, the Commissioner of Sales Tax, Odisha, Cuttack has been pleased to withhold the refund claim of Rs. 26,86,357/-for the period from 1.10.2008 to 30.6.2011 in case of the petitioner till disposal of the Second Appeal filed against the First Appellate Order. 2. Petitioner’s case in a nutshell is that it is a Private Limited company under the Companies Act, 1956 and carries on business of execution of works contract under different contractees. It is registered under the Orissa Value Added Tax Act, 2004 (hereinafter referred to as ‘the OVAT Act’). It was assessed by the Sales Tax Officer, Bhubaneswar II Circle, Bhubaneswar-opposite party no. 3 under Section 42 of the OVAT Act for the period from 10.10.2008 to 30.6.2011 vide order dated 1.10.2012 under Annexure-1 and an extra demand of Rs. 4,68,507/-was raised towards tax, interest and penalty. Being aggrieved by the order of assessment, the petitioner preferred First Appeal under Section 77 of the OVAT Act before opposite party no. 2-Deputy Commissioner of Sales Tax (Appeal), Bhubaneswar Range, Bhubaneswar-opposite party no. 2, who vide order dated 30.11.2013 allowed the appeal and held that the petitioner is entitled to get refund of Rs. 26,86,357/-as per the provisions of law. Pursuant to the said order passed in the appeal, no refund was granted to the petitioner and on 20.5.2014, the petitioner received the impugned order passed under Annexure-3 withholding the amount of refund till disposal of the Second Appeal. Hence, the present writ petition. 3. Mr. Das, learned counsel appearing on behalf of petitioner submitted that the impugned order withholding refund of claim under Section 60 of the OVAT Act is bad in law as all the conditions precedent for exercising power of withholding refund are not satisfied. Withholding of excess tax paid by the petitioner as determined by the First Appellate Authority violates Article 265 of the Constitution of India, which enjoins that no tax shall be levied or collected except by authority of law. No reason has been assigned in the impugned order for withholding refund claimed. Withholding of excess tax paid by the petitioner as determined by the First Appellate Authority violates Article 265 of the Constitution of India, which enjoins that no tax shall be levied or collected except by authority of law. No reason has been assigned in the impugned order for withholding refund claimed. The Assessing Officer instead of granting refund which flows from the First Appellate order within sixty days from the date of receipt of the said order as per Section 57 of the OVAT Act issued the impugned order after about five months from the date of passing of the first appellate order. The opposite party no. 1 has issued a circular bearing no. 2211/CT dated 18.2.2014 instructing strict compliance of Section 57 of the OVAT Act and disposal of refund claims. The petitioner being a Private Limited Company substantiates movable and immovable properties in its name. Further, the petitioner is a regular tax payer under the OVAT Act and has been doing business in the State and filing periodical returns with the opposite party-Department. Hence, the action of the opposite parties in withholding the claim of refund is arbitrary or unreasonable. Even though the petitioner has succeeded before the First Appellate Authority, it is suffering for passing of the impugned order withholding the claim of refund legally due to it. Concluding his argument, Mr. Das prayed to quash the impugned order under Annexure-3. Mr. Das further submitted that no opportunity of hearing has been given to the petitioner before passing of the impugned order withholding the claim of refund due to the petitioner. Thus, action of opposite party is violative of principles of natural justice. 4. Mr. R.P. Kar, learned Standing Counsel for the Revenue submitted that there is no illegality in the impugned order passed under Annexure-3 withholding refund which flows from the first appellate order. It was further submitted that where any order giving rise to a refund is subject matter of an appeal or further proceeding or where any other proceeding is pending and the Commissioner is of the opinion that grant of such refund is likely to adversely affect the Revenue and that it may not be possible to recover the amount later, the Commissioner may withhold the refund till final order is passed in such appeal or proceeding. Mr. Mr. Kar further submitted that if the dealer becomes entitled to the refund as a result of the appeal or further proceeding, the dealer is entitled to interest as provided under subsection (1) of Section 59 of the Act. It was further argued that Section 60(1) of the OVAT Act does not provide any opportunity of hearing before passing any order withholding the claim of refund due to a dealer. Therefore, allegation of violation of the principles of natural justice in the present case for not granting opportunity of hearing to the petitioner is not correct. 5. On rival contentions of the parties, the following questions arise for consideration by this Court. (i) Whether the impugned order passed under Annexure-3 withholding refund of Rs. 26,86,357/- which flows from the first appellate order is legally sustainable? (ii) Whether a dealer is entitled to any opportunity of hearing before passing of order under Section 60 of the OVAT Act withholding the claim of refund due to the dealer? (iii) What order? 6. To deal with the above two questions, it is necessary to extract hereunder Section 60 of the OVAT Act. “60. Power to withhold refund in certain cases – (1) Where any order giving rise to a refund is the subject matter of an appeal or further proceeding, or where any other proceeding under this Act is pending and the Commissioner is of the opinion that the grant of such refund is likely to adversely affect the Revenue and that it may not be possible to recover the amount later, the Commissioner may withhold the refund till the final order is passed in such appeal or proceeding. (2) Where a refund is withheld under sub-section (1), the dealer shall be entitled to interest as provided under sub-section (1) of Section 59, if he becomes entitled to the refund as a result of the appeal or further proceeding or as the case may be, any other proceeding, under this Act.” 7. A bare reading of sub-section (1) of Section 60 of the OVAT Act would go to show that for exercising power of withholding refund, the following three conditions are to be satisfied. A bare reading of sub-section (1) of Section 60 of the OVAT Act would go to show that for exercising power of withholding refund, the following three conditions are to be satisfied. (i) The order giving rise to the refund is the subject matter of an appeal or further proceeding; and (ii) The Commissioner is of the opinion that grant of such refund is likely to adversely affect the revenue; and (iii) It may not be possible to recover the amount later. 8. Thus, it is only upon subjective satisfaction of the aforesaid three conditions, an order withholding refund can be passed by the Commissioner. Fulfilment of all the above three conditions is sine qua non for passing the order under sub-section (1) of Section 60 of the OVAT Act withholding refund due to a dealer arising from an order. 9. Perusal of the impugned order reveals that the first condition is satisfied i.e. the order from which the refund flows is the subject mater of Second Appeal. The impugned order does not speak anything about the satisfaction of other two conditions. The said order also does not contain the basis for forming the opinion by the Commissioner that grant of refund would adversely affect the Revenue. 10. The use of expression ‘may’ as in Section 60 of the OVAT Act in the context, confers discretion upon the Commissioner to withhold refund but it does not confer an absolute power on the Commissioner to withhold refund in each and every case where an order gives rise to refund is the subject matter of an appeal or further proceeding. Therefore, the Commissioner must exercise the discretion on relevant grounds and for germane reasons. Language of Section 60(1) of the OVAT Act does not reveal that the legislative intent is to withhold refund wherever an order giving rise to refund is the subject matter of an appeal or further proceeding or other proceedings pending under the OVAT Act. Had it been so, the provisions would have been clearly enjoined that no refund shall be granted till the conclusion of the appeal or further proceeding. 11. Had it been so, the provisions would have been clearly enjoined that no refund shall be granted till the conclusion of the appeal or further proceeding. 11. It is needless to say that the discretion vested with the Commissioner to withhold refund due to the dealer arising out of an order passed by the quasi judicial authority must be exercised judicially as Article 265 of the Constitution enjoins that no tax shall be levied or collected except by authority of law. 12. The matter can be looked at from a different angle. Under the Scheme of the OVAT Act, a dealer need not make an application for refund arising out of the first appellate order and under Section 57 of the OVAT Act, the Assessing Authority is obliged to refund the excess tax paid within a period of 60 days from the date of receipt of the said order giving rise to such refund. In the present case, refund of Rs.26,87,357/- flows from the first appellate order dated 30.11.2013. The impugned order under Annexure-3 withholding refund was passed on 14.5.2014. The first appellate order dated 30.11.2013 (Annexure-2) shows that a copy of the said order was sent to the Sales Tax Officer, Bhubaneswar II Circle, Bhubaneswar vide memo 3203 dated 3.12.2013. The offices of the Assessing Officer and First Appellate Authority function in one building. Therefore, the first appellate order dated 30.11.2013, which was sent to the Sales Tax Officer on 3.12.2013, would hardly take one or two days to reach the office of the Sales Tax Officer, who passed the order of assessment. Therefore, in terms of Section 57 of the OVAT Act, the refund should have been granted to the petitioner by 1st week of February, 2014. No reason whatsoever has been assigned as to why refund has not been granted to the petitioner by 1st week of February, 2014 in terms of Section 57 of the OVAT Act, when no order withholding refund was in existence, which was passed only on 14.5.2014 under Annexure-3. 13. No reason whatsoever has been assigned as to why refund has not been granted to the petitioner by 1st week of February, 2014 in terms of Section 57 of the OVAT Act, when no order withholding refund was in existence, which was passed only on 14.5.2014 under Annexure-3. 13. At this juncture, it may be relevant to refer to the Circular bearing No. 2211/CT dated 18.2.2014 issued by the Commissioner of Commercial Taxes, Odisha, Cuttack instructing strict compliance of Section 57 of the OVAT Act and disposal of refund claims within the prescribed period failing which appropriate action will be initiated against the erring officials, who will also be accountable for the interest borne on such refund. Nothing is brought to our notice by Mr. Kar appearing for the Department to show whether any action has been taken against the Assessing Officer, who apparently has not granted such refund in terms of Section 57 of the OVAT Act and the Circular of the Commissioner of Commercial Taxes dated 18.2.2014. 14. We are shocked that the learned Commissioner of Commercial Taxes instead of taking any action against the Assessing Officer for violating the mandate of Section 57 of the OVAT Act and not following/obeying instruction of the Commissioner for strict compliance of Section 57 of the OVAT Act has passed the impugned order withholding the claim of refund due to the petitioner. 15. It is needless to say that if a subordinate authority will not obey the instruction/order/circular issued by the higher authority in the hierarchy of administration, it would cause chaos in the field of administration and certainly not help in smooth functioning of administration. 16. We further notice that the impugned order has been passed without assigning any valid reason. Virtually it is a non-speaking order. 17. Even in respect of administrative orders Lord Denning, M.R. in Breen V. Amalgamated Engg. Union (1971) 1 All ER 1148, observed: “The giving of reasons is one of the fundamentals of good administration.” 18. In Alexander Machinery (Dudley) Ltd. V. Crabtree (1974) ICR 120 (NIRC) it was observed: “Failure to give reasons amounts to denial of justice”. 19. 17. Even in respect of administrative orders Lord Denning, M.R. in Breen V. Amalgamated Engg. Union (1971) 1 All ER 1148, observed: “The giving of reasons is one of the fundamentals of good administration.” 18. In Alexander Machinery (Dudley) Ltd. V. Crabtree (1974) ICR 120 (NIRC) it was observed: “Failure to give reasons amounts to denial of justice”. 19. The Hon’ble Supreme Court in S.N. Mukherjee v. Union of India, AIR 1990 SC 1984 , held 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 decision-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. The need for recording of reasons is greater in a case where the order is passed at the original stage. 20. Every administrative decision must be hedged by reasons. [See Life Insurance Corporation of India and another v. Consumer Education and Research Centre and others, (1995) 5 SCC 482 )]. 21. In Vasant D. Bhavsar V. Bar Council of India (1999) 1 SCC 45 , the apex Court held that an authority must pass a speaking and reasoned order indicating the material on which its conclusions are based. 22. Law is well-settled that reason is the heartbeat of every conclusion. It introduces clarity in an order and without the same it becomes lifeless. See Raj Kishore Jha v. State of Bihar, (2003) 11 SCC 519 . 23. For the reasons stated above, the impugned order passed under Annexure-3 withholding refund of Rs. 26,86,357/- which flows from the first appellate order is not legally sustainable. 24. Question No. (ii) is whether a dealer is entitled to any opportunity of hearing before passing of order under Section 60(1) of the OVAT Act withholding claim of refund due to the dealer. 25. It may be relevant to note here that if an order has civil consequence and adversely affects the party; the affected party must be given an opportunity of hearing before such order is passed. The order passed in exercise of power vested under Section 60(1) of the OVAT Act withholding refund due to the dealer is certainly detrimental to the interest of the dealer. The order passed in exercise of power vested under Section 60(1) of the OVAT Act withholding refund due to the dealer is certainly detrimental to the interest of the dealer. Therefore, even though Section 60(1) of the OVAT Act does not say for providing an opportunity of hearing to the dealer before passing the order withholding refund, such opportunity of hearing should be afforded to the dealer in the interest of natural justice. 26. At this juncture, it would be beneficial to refer to the following decisions of the Hon’ble Supreme Court and this Court which are relevant for our purpose. 27. The Hon’ble Supreme Court in the case of Baldev Singh and others vs. State of Himachal Pradesh and others, (1987) 2 SCC 510 has held as under: “........but the settled position in law is that where exercise of a power results in civil consequences to citizens, unless the statute specifically rules out the application of natural justice, the rules of natural justice would apply. We accept the submission on behalf of the appellants that before the notified area was constituted in terms of Section 256 of the Act, the people of the locality should have been afforded an opportunity of being heard and the administrative decision by the State Government should have been taken after considering the views of the residents. Denial of such opportunity is not in consonance with the scheme of the Rule of Law governing our society. We must clarify that the hearing contemplated is not required to be oral and can be by inviting objections and disposing them of in a fair way.” 28. The Hon’ble Supreme Court in the case of Dr. Rash Lal Yadav v. State of Bihar and others, (1994) 5 SCC 267 , has held as under: “The concept of natural justice is not a static one but is an ever expanding concept. In the initial stages it was thought that it had only two elements, namely, (i) no one shall be a judge in his own cause, and (ii) no one shall be condemned unheard. With the passage of time a third element was introduced, namely, of procedural reasonableness because the main objective of the requirement of rule of natural justice is to promote justice and prevent its miscarriage. With the passage of time a third element was introduced, namely, of procedural reasonableness because the main objective of the requirement of rule of natural justice is to promote justice and prevent its miscarriage. Therefore, when the legislature confers power in the State Government to be exercised in certain circumstances or eventualities, it would be right to presume that the legislature intends that the said power be exercised in the manner envisaged by the statute. If the statute confers drastic powers, such powers must be exercised in a proper and fair manner. Drastic substantive laws can be suffered only if they are fairly and reasonably applied. In order to ensure fair and reasonable application of such laws courts have, over a period of time, devised rules of fair procedure to avoid arbitrary exercise of such powers. True it is, the rules of natural justice operate as checks on the freedom of administrative action and often prove time-consuming but that is the price one has to pay to ensure fairness in administrative action. And this fairness can be ensured by adherence to the expanded notion of rule of natural justice. Therefore, where a statute confers wide powers on an administrative authority coupled with wide discretion, the possibility of its arbitrary use can be controlled or checked by insisting on their being exercised in a manner which can be said to be procedurally fair. Rules of natural justice are, therefore, devised for ensuring fairness and promoting satisfactory decision-making. Where the statute is silent and a contrary intention cannot be implied the requirement of the applicability of the rule of natural justice is read into it to ensure fairness and to protect the action from the charge of arbitrariness. Natural justice has thus secured a foothold to supplement enacted law by operating as an implied mandatory requirement thereby protecting it from the vice of arbitrariness. Unless the expressly or by necessary implication excludes the application of the rule of natural justice, courts will read the said requirements in enactments that are silent and insist on its application even in cases of administrative action having civil consequences.” 29. In Basudeo Tiwary v. Sido Kanhu University, (1998) 8 SCC 194 , the Hon’ble Supreme Court held that in order to impose procedural safeguards, the Court has read the requirement of natural justice in many situations when the statute is silent on this point. In Basudeo Tiwary v. Sido Kanhu University, (1998) 8 SCC 194 , the Hon’ble Supreme Court held that in order to impose procedural safeguards, the Court has read the requirement of natural justice in many situations when the statute is silent on this point. The approach of the Hon’ble Supreme Court in this regard is that omission to impose the hearing requirement in the statute under which the impugned action is being taken does not exclude hearing-it may be implied from the nature of the power – particularly when the right of a party is affected adversely. The justification for reading such a requirement is that the Court merely supplies omission of the Legislature. 30. This Court in the case of Dr. Sarojini Pradhan vs. Union of India and another, AIR 1988 Orissa 96, has held as under: “THE Law must, therefore, now be taken to be well settled that even in an administrative proceeding, which involves civil consequences, the doctrine of natural justice must be held to be applicable" it cannot be disputed that refusal by the Central Government exercising its jurisdiction under S. 5(2) involves civil consequences of considerable magnitude for the applicant for grant of mining lease. If an opportunity is afforded, the applicant may possibly convince the Central Government why approval should be accorded, to use the words of Lord Parker, to disabuse the Central Government of its impression inclining it not to accord approval. The applicant may show that the grounds on which the Central Government is not inclined to accord approval are unsustainable, erroneous, even absurd. The wisest even is liable to err. The situation or nature of the exercise is not such as to attract the exclusionary principles. Whereas an opportunity of hearing does not prejudice the Central Government, the denial of it might prejudicially affect the applicant. Even assuming that the exercise under S. 5(2) is of administrative character, what heavens would fall if an opportunity of hearing is given. By grant of lease, there is augmentation of the revenue of the State by way of royalty. Exploitation of minerals leads to economic development of the State and the nation. Refusal to accord approval also affects the State Government where the State Government is inclined in favour of the grant. By grant of lease, there is augmentation of the revenue of the State by way of royalty. Exploitation of minerals leads to economic development of the State and the nation. Refusal to accord approval also affects the State Government where the State Government is inclined in favour of the grant. Therefore, when by the refusal not only the applicant but also the State Government, where it is inclined in favour of the grant, would be so prejudicially affected, in our opinion, the principles of natural justice would supplement the law contained in S. 5(2). Our view gets support from the decision of the Patna High Court in Ramnik Lal Kothari v. Govt. of India, AIR 1970 Pat 189 . Therein, Untwalia, J. (as he then was) speaking for the Court observed : ". . . . THE order of the Central Government in exercise of the said power may be executive in character, as contended on its behalf by the learned Government pleader. Yet I am of the opinion that if the exercise of power under S. 5 (2) of the Act and the order made thereunder adversely affects or prejudices a person, the trend of the decisions of the Courts in India as also in England is that such a person must be given an opportunity to have his representation or say in regard to the matter which is going to affect him adversely. To put it briefly, the power may be executive, but it has to be exercised in accordance with the principles of natural justice which are generally applicable for the exercise of power in a judicial manner. Reference in this connection may be made to a recent decision of the Supreme Court in the Union of India v. M/s. Anglo Afghan Agencies, AIR 1968 SC 718 . I do not mean to suggest that invariably in all cases, the power under S. 5 (2) of the Act has got to be exercised by the Central Government keeping in view the principles for the exercise of a judicial power. But by and large it may affect or prejudice the rights or interest of a person; in all fairness, the person concerned must be given a reasonable opportunity to make his representation. "we are in respectful agreement with the aforesaid view. But by and large it may affect or prejudice the rights or interest of a person; in all fairness, the person concerned must be given a reasonable opportunity to make his representation. "we are in respectful agreement with the aforesaid view. Inasmuch as the petitioner was not afforded an opportunity, and, therefore, the principles of natural justice were violated, the decision of the Central Government as per Annexure-5 is invalid and void.” 31. In the present case, admittedly petitioner was not afforded an opportunity of hearing before the impugned order withholding refund claimed by the petitioner was passed. 32. In view of the above, the impugned order dated 14.5.2014 (Annexure-3) passed by the Sales Tax Officer, Bhubaneswar II Circle, Bhubaneswar withholding refund claims made by the petitioner is hereby quashed. 33. In the result, this writ petition is allowed, but in the circumstances without any order as to costs. I. Mahanty, J. : I agree.