Merits determination in an appellant's absence is impermissible without clear statutory authority, and natural justice requires a fair hearing.

An appeal cannot be decided on merits against an absent appellant unless the governing statute clearly authorises that course. The Court read the ex parte power in the U.P. Value Added Tax Rules as relating to absence of the respondent, not as permitting a merits-based determination against the appellant. Deciding the second appeal ex parte on merits was held inconsistent with fair hearing and natural justice, so the ex parte merits order was set aside and the matter restored for fresh adjudication after hearing both sides.

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Issues: (i) Whether the Commercial Tax Tribunal could decide a second appeal on merits ex parte when the appellant failed to appear. (ii) Whether the impugned ex parte appellate order was liable to be set aside and the matter remitted for fresh decision.

Issue (i): Whether the Commercial Tax Tribunal could decide a second appeal on merits ex parte when the appellant failed to appear.

Analysis: The governing principle drawn from the Code of Civil Procedure is that where an appellant does not appear, the appeal is to be dismissed for default and not decided on merits. Although Rule 63(4) of the U.P. Value Added Tax Rules, 2008 permits an appeal to be heard and decided ex parte when proper service is effected and a party is absent, the term "ex parte" was read as referring to absence of the respondent and not as authorising a merits-based decision against an absent appellant. Deciding the appeal on merits in the appellant's absence was also inconsistent with the requirement of fair hearing and the rule of audi alteram partem.

Conclusion: The Tribunal could not lawfully decide the appeal on merits against the absent appellant and should have dismissed it for want of prosecution.

Issue (ii): Whether the impugned ex parte appellate order was liable to be set aside and the matter remitted for fresh decision.

Analysis: Since the Tribunal proceeded to determine the appeal on merits in the absence of the appellant, the order was held to be illegal and arbitrary. The Court accepted that the proper course was to set aside the ex parte merits order and restore the appeal before the Tribunal so that both sides could be heard. The Tribunal was also directed to decide the matter expeditiously after affording opportunity of hearing to the parties.

Conclusion: The impugned order was set aside and the matter was remitted to the Tribunal for fresh adjudication.

Final Conclusion: The revisionist obtained relief by way of setting aside of the Tribunal's ex parte merits order and restoration of the appeal for fresh consideration after hearing both sides.

Ratio Decidendi: Where an appellant is absent, a merits determination in appeal is impermissible unless the governing statute clearly authorises such course, and an ex parte disposal must conform to the requirements of fair hearing and natural justice.

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