Absence of Appellant: Appellate Authority Erred in Deciding on Merits; Should Have Dismissed for Non-Prosecution to Preserve Right of Recall

ISSUE

Whether the Appellate Authority, upon finding that the appellant failed to appear on the scheduled dates, is justified in deciding the appeal on merits and rejecting it, or whether it should strictly dismiss the appeal in default (for non-prosecution) to keep the remedy of restoration alive.

FACTS

The Appeal: The petitioner preferred an appeal under Section 107 against an order imposing a penalty.
The Default: The petitioner-appellant failed to appear before the Appellate Authority on two occasions despite filing the appeal.
The Impugned Order: Instead of dismissing the appeal for default (non-appearance), the Appellate Authority proceeded to examine the case on merits and rejected the appeal, effectively closing the case.
The Prejudice: The petitioner argued that by deciding on merits in their absence, they were denied the opportunity to move an application for recall/restoration of the appeal, which would have been possible if it were merely dismissed for non-prosecution.

HELD

Procedural Error: The High Court held that once a party does not appear, the Appellate Authority ought to have dismissed the appeal for non-prosecution (default) rather than scrutinizing the order of the lower authority on merits ex-parte.
Right to Recall: The Court emphasized that if an appeal is dismissed in default, the appellant retains the statutory right/opportunity to move an application for recalling that order and explaining their absence. Deciding on merits denies this specific remedy.
Interest of Justice: To prevent prejudice and ensure a fair hearing, the impugned order was set aside.
Verdict: The appeal was restored to the file of the Appellate Authority for fresh adjudication. [In Favour of Assessee]

KEY TAKEAWAYS

Default vs. Merits: There is a massive legal difference between an appeal dismissed for “default” and one dismissed on “merits.”
- Default: You can file a simple application to the same authority to restore the appeal.
- Merits: You must appeal to a higher court/tribunal (which is more expensive and difficult).
Strategy for Non-Appearance: If you miss a hearing and find a negative order, check if the officer discussed the facts/merits. If they did, cite this judgment to argue that they exceeded their jurisdiction by deciding an ex-parte matter on merits instead of simply dismissing it for default.
Restoration Application: If your appeal is dismissed for non-prosecution, file a Restoration Application immediately (usually within 30 days), citing valid reasons (medical, traffic, notice not received) for your absence.

HIGH COURT OF ALLAHABAD

Mukund Enterprises

State of U.P.^*

Vikas Budhwar, J.

WRIT TAX No. 6385 of 2025

DECEMBER 1, 2025

Pooja Talwar for the Petitioner. N.P. Singh, learned Standing Counsel for the Respondent.

ORDER

1. Heard Ms. Pooja Talwar, learned counsel for the petitioner as well as Sri N.P. Singh, learned Standing Counsel for the department.

2. The present case has been nominated to the Court by order of the Hon’ble the Chief Justice.

3. A Statement has been made by Sri N.P. Singh, learned Standing Counsel for the department that he possesses complete instructions and he is in a position to argue the matter and does not propose to file any response and the writ petition may be decided on the basis of documents available on record.

4. With the consent of the parties, the writ petition is being decided at the fresh stage.

5. The case of the writ petitioner is that petitioner is a registered dealer registered in the state of M.P. under the applicable GST norms. The writ petitioner claims to have sold 310 quintals of mustard seeds to one M/s Aata Chakki and Oil Mills, West Bengal. Pursuant to which, tax invoice stood generated and E-Way bills stood prepared. The consignments stood loaded in a vehicle bearing registration No.UP-68-AT-1355 along with tax invoice and the receipt of the Mandi Samiti. The said vehicle came to be seized by the Commercial Tax Officer jurisdiction Sector 6, Mahoba on 25.04.2025 at 23:31 hours and the statement of the driver stood recorded in form MOV-01 on 26.04.2025. Physical verification of the vehicle was also done and thereafter the Commercial Tax Officer jurisdiction Sector 6, Mahoba, respondent No.2 proceeded to pass an order of detention under Section 129 (1) of the U.P. GST/CGST Act read with Section 20 of the IGST Act 26.04.2025 stating the reasons for detention of the goods being transported by non-bona fide person without valid documents. Accordingly, a show cause notice came to be issued on 26.04.2025. The writ petitioners claims to have submitted reply to the said notice. The entire amount of penalty through challan under protest came to be deposited on 02.05.2025 and thereafter an order came to be passed imposing the penalty of Rs.18,58,605/-under Section 129 (3) of U.P. GST/CGST Act read with Section 20 of IGST Act. Against the said order, the writ petitioner preferred an appeal on 27.08.2025 which came to be rejected by the Additional Commissioner Grade-II (Appeal) State Tax, Banda, District Banda on 09.09.2025.

6. Questioning both the orders, the present writ petition has been preferred. Learned counsel for the petitioner has sought to argue that the order dated 09.09.2025 passed by the third respondent/appellate authority cannot be sustained for a simple reason that though in the order itself there is a clear cut recital that on two occasions post filing of the appeal i.e. 02.09.2025 and 08.09.2025 the writ petitioner who was an appellant therein was accorded opportunity to set forth his case but the writ petitioner did not appear. Pursuant thereto, the appeal was rejected on merits. Submission is that in case if the case of the respondent is taken into face value then too in absence of the appellant who had preferred an appeal, the appeal could have been dismissed in default for non prosecution but merits were totally uncalled for. Further, it is contended that in view of the Section 75 of the U.P. Goods and Services Tax Act, 2017 appending the proviso, there happens to be a caveat that adjournments shall not be granted for more than three times. Thus, submission is that at least one more opportunity ought to have been accorded to the appellant to put forward its stand.

7. Further submission is that the order in question cannot be said to be as per the mandate of law though the merits have been touched and appeal has been dismissed for non prosecution but on the other hand, a bare look of the order would reveal that while rejecting the appeal contentions which were already on record in the memo of appeal had not been touched in the correct prospective.

8. Sri N.P. Singh, learned Standing Counsel for the department submits that whatever might be it is the appellant/writ petitioner who is responsible for the said situation and accordingly, the writ petitioner/appellant has to pay for it.

9. I have heard the submissions so made across the bar and perused the record.

10. Facts are not in issue. It is not an issue that against the order dated 02.05.2025 passed by the competent authority, an appeal came to be preferred before appellate authority which has been rejected on 09.09.2025. The order in question reads as under:-

“1. राज्य कर अधिकारी, (सचल दल) राज्य कर, महोबा (जिसे आगे प्रापर आफीसर कहा गया है) द्वारा श्री शारदा प्रसाद दुबे, मरसादा बेरावा पहारपुर, कोइरौना, ग्यानपुर, सन्त रविदास नगर, भदोही, GSTIN-092500018928TMP, (जिसे आगे अपीलार्थी कहा गया है), के विरुद्ध एकीकृत माल एवं सेवा कर अधिनियम-2017 (जिसे आगे अधिनियम कहा गया है) की धारा-129 (3) के अन्तर्गत पारित आदेश सख्या-ZD090525010794A दिनांक 02-05-2025 से क्षुब्ध होकर अपीलार्थी की ओर से प्रश्नगत अपील दाखिल की गयी है जिसमे एकीकृत कर के अर्थदण्ड की धनराशि रुपये 18,58,605.00 विवादित है।

2-वाद के तथ्य संक्षेप में इस प्रकार है कि प्रापर आफीसर द्वारा दिनांक 25-04-2025 को वाहन संख्या-UP66AT1355 को समय लगभग 10:05 PM पर श्रीनगर महोबा नामक स्थान पर परिवहन के दौरान जाँच हेतु रोका गया जिसमे सरसो लोड पाया गया जिसका परिवहन छतरपुर (मध्य प्रदेश) से पश्चिम बंगाल के लिये किया जा रहा था। जाँच के समय वाहन चालक द्वारा प्रस्तुत प्रपत्रों यथा सप्लायर फर्म सर्वश्री गणेश ट्रेडिंग कम्पनी, वार्ड नम्बर-23, दुर्गा घाटी पुलिया के पास जगरपुर चक गुना, मध्य प्रदेश, GSTIN-23HUBPB1625NIZI द्वारा जारी टैक्स इनवायस-37 दिनांक 25-04-2025 एवं ई-वे बिल संख्या-6518 9555 4024 दिनांक 25-04-2025 में 310 कुन्तल मूंगफली दाना का परिवहन घोषित है जबकि वाहन पर वास्तव में मूंगफली नहीं बल्कि सरसो का परिवहन किया जा रहा है। इस प्रकार वाहन में परिवहन किया जा रहा माल प्रपत्री में घोषित माल से पूर्णतया भिन्न है। उक्त के अतिरिक्त प्रपत्रों में माल का परिहवन गुना (मध्य प्रदेश) से पश्चिम बंगाल को घोषित किया गया है जबकि माल गुना से लोड होना नहीं पाया गया। वाहन चालक के बयान एवं ई-वे बिल ऐप पर उपलब्ध वाहन की लोकेशन के विवरण के अनुसार माल छतरपुर (मध्य प्रदेश) से लोड हुआ है। इस प्रकार चाहन पर परिवहन किये जा रहे माल से सम्बन्धित प्रस्तुत किये गये प्रपत्र Genuine नहीं पाये गये। साथ ही भौतिक सत्यापन पर वाहन पर 310 कुन्तल सरसो लोड पाया गया है जिसके सम्बन्ध में कोई वैध प्रपत्र नहीं प्रस्तुत किया गया। जिन्हें प्रापर आफीसर द्वारा अधिनियम / नियमावली में विहित प्राविधानों का उल्लंघन करते हुये माल का परिवहन करते पाये जाने के आधार पर धारा-129 (3) के अन्तर्गत नोटिस जारी की गयी एवं अपीलार्थी द्वारा एकीकृत कर के अर्थदण्ड का भुगतान करने पर माल वाहन सहित अवमुक्त किया गया।

3- अपीलार्थी को अपील की व्यक्तिगत सुनवायी हेतु दिनांक 02-09-2025, तत्पश्चात दिनाक 08-09-2025 के लिये आन-लाइन नोटिस प्रेषित की गयी किन्तु नियत तिथि पर अपीलार्की ओर से न तो कोई उपस्थित हुआ एवं न ही कोई स्थगन प्रार्थना पत्र आन-लाइन/आफ-लाइन प्रस्तुत करते हुये समय की माँग की गयी है। स्पष्ट है कि अपीलार्थी अपील की सुनवायी में रुचि नहीं रखते है जबकि उन्हे अपील की सुनवायी हेतु दो अवसर प्रदान किये जा चुके है। अतः प्रश्नगत अपील का निस्तारण पत्रावली पर उपलब्ध प्रपत्रों एवं गुण दोष के आधार पर किया जा रहा है।थी

11. A bare look of the order of appellate authority reveals that though it has been recited that the appellant/writ petitioner did not appear despite filing of the appeal on two occasions i.e. 02.09.2025 and 08.09.2025 but instead of dismissing the appeal for non prosecution the appellate authority had gone into the merits of the matter. In the opinion of the Court, once a party does not appear then normally the appellate authority who is to scrutinize the order of the competent, first authority, ought to have dismissed the appeal for non prosecution as there might be certain circumstances which would have prevented in not appearing before the appellate authority. In case the appeal would have been dismissed in default for non prosecution, at least an opportunity would have been to the appellant assessee to move an application for recalling of same if it is permissible and to advance its argument. Since the Court finds that even otherwise borrowing the analogy from first proviso to sub-section (5) of the Section 75 of the U.P. Goods and Services Tax Act, 2017, three adjournments ought to be granted and here two adjournments were granted so in the interest of justice, it would subserve that the appeal be restored and be heard.

12. Accordingly, in the facts and circumstances of the case, the writ petition stands decided in the following terms:

(a)

The order dated 09.09.2025 passed by the Additional Commissioner, Grade-II (Appeal) State Tax, Banda, Distric Banda rejecting the appeal is set aside.

(b)

The appeal stands restored to its number.

(c)

Since the appellant/writ petitioner as well as the State are represented through their counsel, thus, it would be deemed that they have full knowledge of this order passed today. Thus, this Court requires the appellate authority to fix a date in the third week of December, 2025 and on the said date, the appeal be heard and orders be passed in this regard within a period of two months.

(d)

Ms. Pooja Talwar, learned counsel for the writ petitioner/appellant, as per instructions, submits that her client would not take any adjournment on the date fixed.

13. With the aforesaid observations, the writ petition stands disposed of.