2023 (8) TMI 1356 - HC - GST

Appeal cannot be dismissed solely for non-prosecution without considering merits under statutory mandate

Purushottam Stores Versus State of Bihar and Others

The HC set aside an appellate order that dismissed an appeal solely for non-prosecution despite the appellant's absence. The court held that the Appellate ... Maintainability of appeal - appeal dismissed for reason of non-prosecution of the same when even in the context of non-appearance of the appellant, the Appellate Authority was statutorily obliged to dispose of the appeal on merits - HELD THAT:- The specific statutory mandate is that after hearing the appellant, the Appellate Authority is to make further enquiry, if found necessary and pass such orders as it thinks just and proper, confirming, modifying or annulling the decision or order appealed against. Such affirmation, modification or annulment shall not be an empty formality nor can it be mechanical, without the consideration of the grounds of appeal - When an appeal is dismissed for reason only of absence of the appellant or lack of effective prosecution, then the Tribunal should be found to have abdicated its powers and not followed the statutory mandate. There is no efficacious alternate remedy available as of now, against the appellate order, since the Tribunal, to which a further appeal is provided, has not been constituted. Leaving the Assessee/petitioner to the appellate remedy as and when the Tribunal is constituted, that too with a further direction to pay 20% of the disputed tax amount would unnecessarily prejudice the assessee. It is deemed appropriate that the appellate order is set aside without any observation on merit - the Appellate Authority are directed to restore the appeal to its files and the appellant shall appear before the authority on 04.05.2023 - petition allowed. Issues involved:The petitioner challenged the appellate order under Bihar Goods and Services Tax Act, 2017, citing non-prosecution as the reason for dismissal by the Appellate Authority. The key issue was whether the Appellate Authority was obligated to dispose of the appeal on merits despite the non-appearance of the appellant.Comprehensive details for each issue:1. The petitioner contended that the Appellate Authority dismissed the appeal for non-prosecution, contrary to the statutory obligation to decide on merits, as highlighted in the decision of the Supreme Court in Commissioner of Income Tax, Madras vs. S. Chenniappa Mudaliar, Madurai. The Government Pleader argued that the grounds raised by the appellant were considered by the Assessing Officer and reiterated by the Appellate Authority, which also noted the consistent non-appearance of the appellant. The absence of provision for the GST Tribunal at the time led the Court to grant liberty for approaching the Tribunal in the future, with a stay on recovery proceedings upon deposit of 20% of the disputed tax amount.2. The Court examined the statutory provisions under the BGST Act, emphasizing the necessity for the Appellate Authority to conduct further inquiry, hear the appellant, and pass orders confirming, modifying, or annulling the appealed decision. The order must be in writing, stating the points for determination, decision, and reasons. Failure to adhere to this process would indicate an abdication of powers by the Tribunal.3. Upon reviewing the impugned order, the Court found a lack of consideration on merits and non-compliance with Section 107 requirements. Citing the precedent that Article 226 of the Constitution can be invoked in exceptional circumstances, especially in cases of a clear abuse of process, the Court set aside the appellate order. With no alternative remedy available due to the absence of the Tribunal, the Court directed the Appellate Authority to restore the appeal, ensure a hearing, and dispose of the appeal on merits within two months from the last hearing, emphasizing the need for a speaking order even in the absence of the appellant or their representative.4. The judgment concluded by allowing the writ petition with the specified directions, emphasizing the importance of due process and adherence to statutory mandates in the disposal of appeals under the BGST Act.