The appeal was filed by the assessee against the order passed by CESTAT. The appellant challenged the order of the Tribunal for want of reasons and contending that the impugned order was arbitrary. It was submitted that the impugned order of the Tribunal was arbitrary and suffers from non application of mind.

The issue arose for consideration was,  whether it was permissible for the Tribunal to brush aside the submission advanced by the appellant without threadbare discussion and without recording reasons in support of the view taken.

The Hon’ble Court held that the impugned order passed by the Tribunal does not state any reasons for the view taken. In absence of reasons in support of the order it was difficult to assume that the Tribunal had properly applied its mind before passing the order directing pre deposit.

It was further observed that no doubt, true that there is no precise statutory or other definition of the term “arbitrary”. Arbitrariness in making an order by the authority manifest itself in different forms. Non application of mind by the authority making an order was only one of them. Every order passed by the judicial or quasi judicial authority must disclose due and proper application of mind by the person making order. This may be evident from the order itself or the record contemporaneously maintained by the authority. Application of mind is best demonstrated by disclosure of its mind by the authority making the order. Absence of reasons either in the order passed by the authority or in the record contemporaneously maintained, is clearly suggestive of the order being arbitrary and in breach of the principles of natural justice hence illegal and unsustainable.  In the result, impugned order was set aside.