Natural justice bars dismissal in default of VAT appeals where the statute does not expressly permit it.

The Kerala HC held that the first appellate authority could not dismiss VAT appeals in default under Section 55(5) because the provision did not expressly permit such dismissal and the orders showed no merits-based consideration. The absence of a speaking order and non-compliance with natural justice meant the dismissals could not stand. The Court further found that the assessee had been denied a proper hearing, so the impugned orders were set aside and the appeals were remitted to the appellate authority for fresh disposal in accordance with law. The interim arrangement was directed to revive on restoration.

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Issues: (i) Whether the first appellate authority could dismiss the appeals in default under Section 55(5) of the Kerala Value Added Tax Act, 2003; (ii) Whether the impugned orders deserved to be set aside for want of opportunity of hearing and remitted for fresh disposal.

Issue (i): Whether the first appellate authority could dismiss the appeals in default under Section 55(5) of the Kerala Value Added Tax Act, 2003.

Analysis: Section 55(5) did not expressly authorise dismissal of the appeals in default. The impugned orders reflected only that two opportunities had been afforded and did not show application of mind to the merits. The absence of a speaking consideration and the failure to adhere to natural justice weighed against sustaining the dismissals.

Conclusion: The dismissal in default was not sustained.

Issue (ii): Whether the impugned orders deserved to be set aside for want of opportunity of hearing and remitted for fresh disposal.

Analysis: Since the appeals arose from assessment orders and the petitioner had sought adjournment, the matters required reconsideration after affording a proper hearing. The proceedings were therefore directed to be reopened before the first appellate authority and heard afresh in accordance with law.

Conclusion: The impugned orders were set aside and the appeals were remitted for fresh hearing.

Final Conclusion: The assessee succeeded in obtaining restoration of the appeals before the first appellate authority, with the interim arrangement directed to revive on restoration.

Ratio Decidendi: An appellate authority cannot sustain dismissal in default where the governing provision does not expressly authorise it and where the order is made without affording a proper hearing consistent with natural justice.

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