Appellate Order Dismissing Appeal Ex-Parte Quashed for Natural Justice Violation; Matter Remanded.
Issue:
Whether an appellate order dismissing an appeal should be quashed if it is passed ex-parte (without notice to the assessee) on a date different from the last scheduled hearing date and lacks proper reasoning, thereby violating principles of natural justice.
Facts:
The assessee’s premises were surveyed, and excess stock was found. Based on this, proceedings were initiated, and an order was passed under Section 73 of the Central Goods and Services Tax Act, 2017 (CGST Act) / Uttar Pradesh Goods and Services Tax Act, 2017 (UPGST Act), imposing a demand. The assessee preferred an appeal against this order. Several hearing dates were fixed for the appeal, with the last scheduled date being January 18, 2022. However, instead of passing the order on this date, the impugned order dismissing the assessee’s appeal was passed two days later, on January 20, 2022, without any prior notice to the assessee that the order would be passed on this date. The assessee filed a writ petition challenging this appellate order.
Decision:
In favor of the assessee (Matter remanded): The court noted that the date on which the impugned order was passed (January 20, 2022), the assessee was not put to notice. This itself was deemed a violation of the principles of natural justice. Furthermore, the impugned order showed that no proper reason had been assigned for dismissing the appeal. In view of these violations, the impugned order was quashed, and the matter was remanded back to the Appellate Authority for fresh adjudication.
Key Takeaways:
- Principle of Natural Justice in Appellate Proceedings: Even in appellate proceedings, the principles of natural justice, particularly the right to be heard and to be informed of the date of decision, are paramount. Passing an order on a date for which the assessee was not put to notice (especially if it’s different from the last scheduled hearing date) is a clear violation.
- Speaking Order Requirement (Section 107(12)): Section 107(12) of the CGST Act mandates that the Appellate Authority pass a “speaking order” stating the points for determination, the decision thereon, and the reasons for such decision. An order that lacks proper reasoning for dismissal is procedurally flawed.
- Consequences of Ex-parte Order: An ex-parte order passed without proper notice or adequate opportunity to the assessee is vulnerable to being set aside by higher courts.
- Remand for Fresh Adjudication: The typical remedy for such procedural irregularities is to quash the flawed order and remand the matter back to the Appellate Authority, directing them to decide the appeal afresh after providing a proper opportunity of hearing to the assessee and passing a reasoned order.
- Date of Order vs. Date of Hearing: The discrepancy between the last hearing date and the date of passing the order, without communication to the assessee, is a critical factor indicating a denial of natural justice.
HIGH COURT OF ALLAHABAD
Dilip Kumar Gupta
v.
Additional Commissioner Grade-2 (Appeal)
Piyush Agrawal, J.
WRIT TAX No. 1093 of 2023
MAY 5, 2025
Suyash Agarwal for the Petitioner. Ravi Shanker Pandey for the Respondent.
ORDER
1. Heard Sri Suyash Agarwal, learned counsel for the petitioner and Sri Ravi Shanker Pandey, learned ACSC for the State respondents.
2. The present petition has been filed challenging the order dated 20.01.2022 passed by the respondent no.1- Additional Commissioner Grade-2 (Appeal) Judicial Area-3, Commercial Tax, Prayagraj in Appeal No.AD090221011476G.
3. Counsel for the petitioner submits that the petitioner is engaged in the business of jewellery and money lending in the name and style of M/s Jai Mata Di Jwellers Chowk Bazar, Fatehpur. When the business premises of the petitioner was surveyed by the income tax department excess stock was found, which was not declared in his return of income. On the basis of the said survey, the proceedings under GST Act were initiated and an order dated 27.12.2019 was passed by the respondent no.2 under Section 73 of UPGST Act, 2017, against which, the petitioner has preferred an appeal, in which, several dates were fixed and the last date was fixed for 18.01.2022, but instead of passing order on the said date, the impugned order was passed on 20.01.2022 dismissing the appeal.
4. He submits that while passing the impugned order observations have come that the petitioner has lost interest and, thereafter, passed an order on the next date, but not on the date fixed, to which, no notice whatsoever given to the petitioner, therefore, the impugned order is bad in the eyes of law. He further submits that as per Section 107 (12) of CGST Act, the authorities are duty bound to pass a reasoned order on merit of the case. In support of his submissions, he has placed reliance upon the judgement of this Court in the case of Videocon D2H LTD. v. State of U.P. [WRIT TAX No. 243 of 2016, dated 16-3-2016]/ 2016 U.P.T.C.- 237 and the judgment of Hon’ble Apex Court in the case of Assistant Commissioner, Commercial Tax Department, Works Contract & Leasing v. Shukla & Brothers [2010] 3 taxmann.com 622 (SC)/2010 0 AIR(SCW) 3277.
5. Per contra, learned counsel for State supported the impugned order and submitted that the petitioner was given ample opportunity to present his case, but the petitioner avoided the hearing and, therefore, the impugned order has rightly been passed.
6. After hearing learned counsel for the parties, the Court has perused the records.
7. It is not in dispute that the last date fixed was 18.01.2022 and the petitioner did not appear. Instead of passing the order on the date fixed the authority concerned has passed an order dismissing the appeal on 20.01.2022, which shows that on the date on which the impugned order was passed, i.e., on 20.01.2022, the petitioner was never put to notice which itself is in violation of principles of natural justice. In turn, the authorities have passed an ex-parte impugned order. The petitioner might have sought adjournment earlier and did not even appear on the earlier occasion, but if the authority wants to pass an order on the next date fixed, it was incumbent upon the authority to pass an order on the date fixed. If the authority does not pass order on the date fixed, in case of nonappearance on behalf of the counsel for the appellant, if the next date is fixed, then the notice or intimation must be made to the party concerned. This Court in the case of M/S Videocon D2H LTD. Her (supra) has expressed the similar view. On this ground the impugned order cannot be sustained.
8. Further Section 107 (12) of the CGST Act specifically provides for passing a reasoned and speaking order. The impugned order shows that no proper reason has been assigned. Once the authority wants to pass an order the reason for passing such order must be given. In the case in hand, the authority has simply dismissed the appeal without proper reason. The Apex Court in the case of Assistant Commissioner, Commercial Tax Department, Works Contract & Leasing (supra) has deprecated such practice. On this ground also, the impugned order cannot be sustained.
9. In view of above, the impugned order dated 20.01.2022 passed by the respondent no.1 cannot be sustained in the eyes of law. The matter requires reconsideration.
10. For the said purpose, the impugned order passed by the respondent no.1 is hereby quashed.
11. The petition is, accordingly, allowed.
12. The matter is remanded back to the Additional Commissioner Grade-2 (Appeal) Judicial Area-3, Commercial Tax, Prayagraj, i.e., respondent no.1 to decide the appeal on merits, after giving due opportunity of hearing to the petitioner, expeditiously, preferably, within a period of three months from the date of production of a certified copy of this order.