Bhagabati Prasad Banerjee, J.

1. In this writ application the Petitioners have challenged the notice for assessment and the orders of assessment contained in Memo. No. III-R-I/66-67/1017 M.T. dated August 30, 1984, being annexure C hereto. Memo No. III-R-I/66-67, Part File/1326 M.T. dated October 19, 1984, being Annex. I hereto, Memo No. III/R-I/1966-67/1503/M.T. dated January 10, 1985, being Annex. F hereto and Memo No. III-R-I/66-67/263/M.T. dated May 26, 1986, being Annex. O hereto respectively all issued by the Deputy Commissioner of Excise (Special), West Bengal.

2. The case of the Petitioner is that the Petitioner No. 1 is the manufacturer, inter alia, of Aguru which is manufactured with rectified spirit at the non-bonded manufactory of the Petitioners under licence being licence in form No. L-2 under Medicinal and Toilet Preparations (Excise Duties) Act, 1955, issued by the Commissioner of Excise, West Bengal, the Petitioner also manufacturer, inter alia Sindur, Soap and other non-excisable articles under the State Excise Laws. It is stated that the product of Aguru manufactured by the Petitioner No. 1 is used as offerings in worship of Hindu deities. The labels used on the product Aguru containers and also the advertisement issued by the Petitioner company speak in unambiguous language the use of the product. The excise authorities caused an enquiry and inspection held with regard to the manufacture and use of the said product at the manufactory on December 15, 1983, and December 20, 1983, respectively and found that the alleged wastage of 1785.2 Bulk Litres, i.e. 2856.32 London Proof Litres of rectified spirit during the period from May 20, 1981, to November 24, 1983, and found some other alleged irregularities as mentioned in the inspection report. The Deputy Commissioner of Excise (Special), Excise Directorate, Government of West Bengal, on the basis of the said inspection report issued a notice on August 30, 1984, directing the Petitioner to explain in writing as to why duty as mentioned in the said notice and penalty of Rs. 1,000 should not be levied under Section 3 of the Medicinal and Toilet Preparations (Excise Duties) Act read with Rule. 7(b) of the Medicinal and Toilet Preparations (Excise Duties) Rules and Rules 35(2) and 132 of the Rules framed under the said Act. It is stated that the product Aguru is not manufactured in bond and is not a preparation for use for human consumption. From the said show-cause notice it is evident that the Deputy Commissioner of Excise (Special) assessed the duty of Rs. 1,52,690.72 p. at the rate of Rs. 61.00 p. per London Proof Litres of rectified spirit on total alleged wastage of rectified spirit. Simultaneously a Misc. case No. 4 (M.T.) of 1984-85 under Memo No. 1016(M.T.) dated August 30, 1984, was started against the Petitioner company.

3. Against the said show-cause notice, the Petitioner company made a representation which was submitted on September 10, 1984, stating that the said wastage had complaint of, was due to normal course of business and/or in the process of manufacturing of Aguru. It was further stated that the said wastage was due to the reasons beyond the control in the process of manufacture.

4. It appears that various contentions raised in the said representation, but the said show-cause notice was not considered by the Deputy Commissioner of Excise (Special), West Bengal. Assessment of duty is a quasi-judicial proceeding and the Assessing Authorities are bound to record reasons and/or to consider the reasons and grounds that are taken before the authority concerned. It was the duty on the part of the Respondents to give reasons to apply its mind to the contention raised and to give reasons before any decision is taken rejecting the contention of the Petitioners that the duty should be imposed at the pure rate and under the old item. The hearing is designed to afford the safeguard that one who decides shall be bound in good conscience to consider the evidence to be guided by that alone and to reach his conclusion, not influenced by extraneous consideration which in other fields in determining purely the hearing, is hearing of evidence of argument if one who determined which underlie the order has not or argument. It is manifest that hearing has not been given. The writ Court is not concerned with the rightness of the order but is only concerned with the decision making process and that it is well established principle that while assigning tax and/or imposing duty the authorities concerned are bound by the principle of natural justice which includes giving of reasons.

5. In Siemens Engg. and Mfg. Company v. Union of India : A.I.R. 1976 S.C 1785 Supreme Court observed that it is now settled law that where an authority makes an order in exercise of a quasi-judicial function, it is essential that administrative authorities and Tribunals should record fair and proper hearing to the persons sought to be affected by them. Orders and gide sufficiently clear and explicit reasons in support of the orders made by them. If it is done then administrative authorities and Tribunals exercising quasi judicial function will be able to justify their existence and carry credibility with the people by inspiring confidence in the adjudiciatory process. The rule requiring reasons to be given in support of an order is, like the principle of audi alteram partem, a basic principle of natural justice which must inform every quasi-judicial process and this rule must be observed in its proper spirit and mere pretence of complience with it would not satisfy the requirement of law.

6. In State of West-Bengal v. Atul Krishna Shaw : A.I.R. 1990 S.C. 2205 the Supreme Court observed that giving of reasons is an essential element of administration of justice. A right to reason is; therefore, an indispensable part of sound system of judicial review. Reasoned decision is not only for the purpose of showing that the citizen is receiving justice but also a valid discipline for the Tribunal itself. Therefore, statement of reasons is one of the essentials of justice.

7. In the case S.N. Mukherjee v. Union of India : A.I.R. 1990 S.C. 1984 the Supreme Court also held 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 must record the reasons for its decision. Such a decision is subject to the appellate jurisdiction of the Supreme Court under Article 136 as well as the supervisory jurisdiction of the High Courts under Article. 227 and the reasons, if recorded would enable the Supreme Court or the High Courts to effectively exercise the appellate or supervisory power. But this is not the sole consideration. The other considerations are the requirements of recording reasons would (i) guarantee consideration by the authority, (ii) introduce clarity in the decision and (iii) minimise chances of arbitrariness in decision making. 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 decree of fairness in the process of decision making, keeping in view the expanding horizon of the principle of natural justice. It must be held that the requirement of record can be regarded as one of the principles of natural justice which govern exercise of power by administrative authorities.

8. There was no material on the record to indicate that the disputed preparation falls under item No. l(ii)(b) of the Duty Schedule of the Act and as such the higher duty under that item could not be imposed. In this view of the matter, I am unable to uphold the decision of the Deputy Commissioner of Excise (Special) which is the subject matter of the present writ and in my opinion the matter requires further consideration. Accordingly, I make this rule absolute, set aside the impugned order and send the matter back to the Respondent Deputy Commissioner of Excise (Special) for fresh and further consideration on the materials already on record and on such further materials as may be made available to him by the parties in accordance with law in the light of the observations made in this judgment. There will be no order as to costs.

9. All parties concerned are to action a signed xerox copy of this judgment on the usual undertaking.