Appellate order set aside for deciding ex-parte without hearing parties under UP VAT Act 2008

The Allahabad HC set aside an ex-parte appellate order passed by the Commercial Tax Tribunal under the U.P. Value Added Tax Act, 2008. The court held that deciding an appeal ex-parte on merits without giving reasonable opportunity to parties violates the principle of audi alterum partem and statutory mandate requiring hearing before disposal. The appellate authority should have either dismissed the appeal in default or conducted proper enquiry as mandated. The matter was remitted back to the appellate authority with directions to decide afresh within three months after affording hearing opportunity to parties.

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Issues:
Challenge to order of appellate authority for proceeding ex-parte, Interpretation of Code of Civil Procedure rules, Applicability of Order XLI Rule 17, Compliance with principles of natural justice, Setting aside ex-parte order, Provision for rectification in absence of defendant.

Analysis:
1. The petitioner challenged an order of the appellate authority that proceeded ex-parte due to the absence of the petitioner's counsel. The petitioner argued that the appellate authority should have dismissed the appeal in default rather than deciding on merits, citing provisions of the Code of Civil Procedure related to appearance of parties in suits and appeals.

2. The petitioner relied on Order IX Rule 6 and Rule 8, as well as Order XLI Rule 17 of the Code of Civil Procedure, emphasizing that when an appellant does not appear, the court should dismiss the appeal for want of prosecution. The petitioner also referred to a Supreme Court judgment highlighting the importance of dismissing appeals for non-prosecution rather than deciding on merits in the absence of the appellant.

3. The Court analyzed the statutory provisions of Section 107 of the UP GST Act, emphasizing the requirement for the Appellate Authority to provide a fair hearing to the appellant. The Court noted that the Appellate Authority must conduct a further inquiry and pass orders justly, following the statutory mandate without dismissing appeals merely due to absence of the appellant.

4. The Court reiterated the principle of 'Audi alteram partem,' emphasizing that deciding a case ex-parte without providing a reasonable opportunity to the parties violates this rule. It was highlighted that the Commercial Tax Tribunal should have dismissed the appeal in default rather than proceeding ex-parte and deciding on merits.

5. Referring to a Supreme Court case, the Court emphasized the importance of administrative authorities and tribunals providing fair hearings and clear reasons for their decisions. Additionally, the Court noted that there should be provisions for setting aside ex-parte orders, as highlighted in a judgment interpreting the U.P. Value Added Tax Act.

6. Consequently, the Court held the appellate authority's decision to proceed ex-parte as illegal and arbitrary, setting it aside. The matter was remitted back to the appellate authority for a fresh decision, with directions to expedite the appeal and decide within three months, ensuring compliance with principles of natural justice and procedural fairness.

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