Doctrine of merger and mandatory hearing under GST: time-barred appeal does not merge, and assessment without hearing is vulnerable.
Dismissal of an appeal as time-barred does not result in merger of the original order with the appellate order, because the appeal is not decided on merits. The note also states that an assessment order under the GST Act is unsustainable where no notice of hearing is issued and no opportunity of hearing is afforded before completion of assessment, as section 75(4) makes that hearing mandatory. It records that an order passed in breach of this requirement is liable to be set aside, with the matter remanded for fresh adjudication after hearing.
Issues: (i) Whether dismissal of the appeal as time-barred attracted the doctrine of merger; (ii) whether the assessment order under section 73 of the GST Act was liable to be quashed for want of opportunity of hearing under section 75(4) of the GST Act.
Issue (i): Whether dismissal of the appeal as time-barred attracted the doctrine of merger.
Analysis: The appeal against the order dated 04.12.2023 had been dismissed on limitation and not on merits. A dismissal for want of limitation does not result in merger of the original order with the appellate order.
Conclusion: The doctrine of merger did not apply to the dismissal of the appeal as time-barred.
Issue (ii): Whether the assessment order under section 73 of the GST Act was liable to be quashed for want of opportunity of hearing under section 75(4) of the GST Act.
Analysis: The record disclosed that no notice of hearing had been issued and no opportunity of hearing had been afforded before passing the assessment order. In the absence of such hearing, the order was contrary to the mandatory requirement of section 75(4) of the GST Act.
Conclusion: The assessment order was unsustainable for breach of the requirement of hearing and was liable to be set aside.
Final Conclusion: The petition succeeded on the limited ground of denial of hearing, the impugned orders were quashed, and the matter was remanded for fresh adjudication after affording an opportunity of hearing.
Ratio Decidendi: An assessment order passed without affording the statutorily required opportunity of hearing is liable to be set aside, and dismissal of an appeal as time-barred does not attract the doctrine of merger.
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