GST Appellate Order Invalid if Not Passed on Hearing Date, Remanded for Fresh Decision.

Issue

Is a GST appellate order legally valid if it is passed and issued on a date subsequent to the conclusion of the final hearing, especially when the GST Act does not contain a specific provision that permits such a delayed pronouncement?

Facts

The petitioner challenged a GST appellate order for the period 2018-19.
The core argument was that the order was not passed on the date of the hearing but was issued at a later date, a procedure the petitioner claimed was not supported by law.
The State initially attempted to justify the delay by citing a pre-GST “First Appeal Manual.”
However, in a subsequent counter-affidavit, the State authorities conceded that this manual was not applicable under the current GST regime.
Crucially, both a higher GST authority and the State’s counsel admitted before the court that there is no provision under the UPGST Act that allows an appellate authority to pass an order on a date later than the hearing.

Decision

The High Court ruled that the impugned appellate order could not be sustained in law.
Based on the department’s own admission, the court quashed and set aside the order.
The matter was remanded back to the Additional Commissioner for a fresh decision.
The authority was directed to provide a new opportunity of hearing to the petitioner and pass a reasoned, speaking order in accordance with the law.

Key Takeaways

No Power to Reserve Orders: This judgment highlights a significant procedural aspect: in the absence of a specific enabling provision, GST appellate authorities do not have the inherent power to reserve orders and pronounce them at a later date.
Order Must Follow Hearing Immediately: The ruling implies that the decision should be pronounced at the conclusion of the hearing itself. Any delay between the hearing and the order can render the order invalid.
Pre-GST Manuals are Not Applicable: Departmental procedures and manuals from the pre-GST era (like VAT or Service Tax) cannot be relied upon to justify actions under the GST Act unless they are specifically saved or adopted under the new law.
Admission by Revenue is Fatal: The department’s own concession that their action was not supported by any legal provision was a decisive factor that led to the quashing of the order.

HIGH COURT OF ALLAHABAD

Wonder Enterprises

Additional Commissioner Grade-2

Piyush Agrawal, J.

WRIT TAX No. 1150 of 2024

SEPTEMBER 12, 2024

Aditya Pandey for the Petitioner.

ORDER

1. Rejoinder affidavit filed today on behalf of the petitioner is taken on record.

2. Heard Sri Aditya Pandey, learned counsel for the petitioner and Sri Ravi Shanker Pandey, learned Additional Chief Standing Counsel for the State-respondents.

3. By means of instant writ petition, the following prayer has been made:-

“I. Issue a writ, order or direction in the nature of certiorari for quashing the impugned order dated 07.03.2024 passed by respondent no.1 in Appeal No.GST AD0905220410341/2022, F.Y. 2018-19, under the provisions of Section 74 of the UPGST/CGST Act (Annexure No.1 to the writ petition).

II. Issue a suitable writ, order or direction in the nature of certiorari for quashing the ex-parte order dated 06.10.2021 passed by respondent no.2 under Section 74 of the UPGST/CGST ACt for the tax period of April, 2018 to June 2018, F.Y. 2018-19.

III.

IV.”

4. Learned counsel for the petitioner submits that on the date of hearing of appeal, the order was not passed by the and therefore, the order impugned is bad. He further submits that pursuant to said argument, on 30.07.2024, a counter affidavit was called by the Court from the State duly sworn by respondent no.3, which was filed on 14.08.2024, wherein State-respondent no.3 has placed reliance on the First Appeal Manual dated 20.03.2015 issued by the Commissioner, Commercial Tax, mentioning therein that after hearing the appeal, order can be passed on the later date, this fact has seriously been opposed by the counsel for the petitioner on the ground that no such circular/power or provision under the GST Act, which could empower the authority not to pass the order on the later date of hearing, the said fact is mentioned in para no.4 of counter affidavit filed by the Commissioner, State Tax U.P., Lucknow which reads as under:-

It is clear that first appeal manual dated 20.03.2015 issued by the Commissioner, Commercial Tax is not covered by the above mentioned saving clause in relation to the filing of the appeals under the GST Act. Hence, it is not applicable in the matters relating to GST”

5. Once the higher authority under the GST Act and the counsel appearing for the State has accepted the fact that there is no such provision for passing an order on a later date of hearing, the impugned order 07.03.2024 passed by respondent no.1 in Appeal No.GST AD0905220410341/2022, F.Y. 2018-19 cannot sustain in the eyes of law and the same is liable to be dismissed.

6. In view of the above facts as stated the impugned orders are hereby set aside.

7. The writ petition is allowed, accordingly.

8. The matter is remanded to the Additional Commissioner Grade-2, (Appeal)-5th, State Tax, Kanpur for deciding afresh by passing a reasoned and speaking order, after affording opportunity of hearing to all the stakeholders, within a period of three months from the date of production of certified copy of this order, without granting any unnecessary adjournment to either of the parties.