2025 (9) TMI 976 - HC - GST

Ex parte appellate order quashed for violating natural justice; matter remanded for fresh hearing with personal notice within three months

HC held the impugned ex parte appellate order unlawful for violating natural justice by being passed on a date when the petitioner was not put on notice. ... Violation of principles of natural justice - ex-parte order - impugned order has been passed on the date to which the petitioner was never put to notice - HELD THAT:- This Court, on various occasions, has categorically held that on the date fixed for hearing, the order must be passed and in case the order is to be passed on the later date fixed for hearing, the petitioner should be put to notice of the same. The issue involved in the present case is squarely covered with the decisions of this Court in the cases of M/s Videocon D2h Ltd. [2016 (3) TMI 1466 - ALLAHABAD HIGH COURT], M/s Wonder Enterprises [2024 (9) TMI 1749 - ALLAHABAD HIGH COURT] and Dilip Kumar Gupta [2025 (5) TMI 762 - ALLAHABAD HIGH COURT] where it was held that 'Once the higher authority under the GST Act and the counsel appearing for the State has accepted the fact that there is no such provision for passing an order on a later date of hearing, the impugned order 07.03.2024 passed by respondent no.1 in Appeal No.GST AD0905220410341/2022, F.Y. 2018-19 cannot sustain in the eyes of law and the same is liable to be dismissed.' The impugned order dated 9.4.2025 passed by the first appellate authority cannot be sustained in the eyes of law and same is hereby quashed - matter is remanded to the first appellate authority, respondent no. 2, who shall decide the case after giving due opportunity of personal hearing to the petitioner, expeditiously, preferably within a period of three months from the date of production of a certified copy of this order - Petition partly allowed. ISSUES PRESENTED AND CONSIDERED 1. Whether an order passed by a GST authority or first appellate authority after the date fixed for personal hearing, without giving fresh notice of the later date, is ex parte and liable to be quashed. 2. Whether a first appellate order passed without affording an opportunity of personal hearing and without permitting the party to rebut materials relied upon violates the statutory/constitutional right to fair hearing. 3. Whether an order passed beyond the period prescribed under the GST regime (as contended by the petitioner - i.e., not within the timeframe required from the date fixed for final hearing) is legally impermissible. 4. Relief: Whether the correct remedy is quashing the impugned orders and remanding the matter for fresh decision after affording personal hearing and recording reasons. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Validity of orders passed after the date fixed for hearing without fresh notice Legal framework: Principles of natural justice and the statutory scheme governing adjudication under the GST regime require that a person affected by an adjudicatory order be given notice and an opportunity of hearing. Administrative practice manuals cannot override statutory safeguards where no enabling provision exists allowing an authority to pass order on a later date without re-notification. Precedent treatment: The Court followed earlier decisions of the same High Court which held that orders passed on a date later than the fixed hearing date, without putting the appellant on notice of the later date, are not sustainable. The judgments relied upon (referred to in the record) establish that there is no provision under the GST Act permitting passing orders on a later date without fresh notice. Interpretation and reasoning: The Court examined the factual matrix that the impugned orders were passed after the dates fixed for hearing and noted the absence of communication/notification to the petitioner regarding the later dates. It rejected reliance on internal manuals/circulars (First Appeal Manual) as not creating legal authority to dispense with fresh notice where the statute is silent. The Court reasoned that acceptance by State counsel that no statutory provision permits orders to be passed on a later date without notice confirms the legal position. Ratio vs. Obiter: Ratio - An order passed on a later date without giving fresh notice to the affected party is ex parte and invalid; internal manuals cannot supply statutory authority to bypass notice requirements. Obiter - Discussion of particular administrative practices and formulations in the manual to the extent they are non-statutory guidance. Conclusion: The impugned orders passed without putting the petitioner to notice of the later date are ex parte and cannot be sustained; such orders must be quashed and remitted for fresh consideration with requisite notice. Issue 2 - Requirement of personal hearing and opportunity to rebut material relied upon Legal framework: Fundamental requirement of audi alteram partem under administrative law and fair hearing norms embedded within the GST adjudicatory process require that an assessee/appellant be afforded an opportunity of personal hearing and to rebut materials on which the authority relies before imposing tax, interest or penalty. Precedent treatment: The Court relied on its prior decisions emphasizing the necessity of providing personal hearing and a reasoned order; those precedents were applied rather than distinguished or overruled. Interpretation and reasoning: On the record, the petitioner had filed replies and was listed for personal hearing; the authorities proceeded to pass adjudicatory and appellate orders without affording personal hearing and without allowing rebuttal of relied-upon material. The Court held that such a course deprives the petitioner of the statutory and constitutional right to a fair opportunity and results in an order which is procedurally infirm. Ratio vs. Obiter: Ratio - Where a party has not been afforded the opportunity of personal hearing and to rebut material, the resulting order is procedurally invalid and liable to be set aside. Obiter - Observations regarding how authorities should conduct hearings and avoid unnecessary adjournments when remanding for fresh hearing. Conclusion: The appellate order was unsustainable for failure to afford personal hearing and opportunity to rebut; the matter requires remand for fresh adjudication after hearing. Issue 3 - Timeframe for passing orders after hearing (contention regarding three-day rule) Legal framework: The petitioner contended that orders under the GST regime must be passed within three days from the date fixed for final hearing. The Court considered this contention against statutory provisions and the consistent judicial pronouncement that an order should, ordinarily, be passed on the date fixed and, if not, the party should at least be put on notice of any later date. Precedent treatment: The Court treated prior decisions as applicable in finding that there is no lawful provision permitting a unilateral delay without notice; the earlier rulings were followed rather than overruled. Interpretation and reasoning: The Court noted the petitioner's contention about the three-day requirement but grounded its decision primarily on notice and hearing defects. It reiterated the settled position that even where administrative timelines are referenced, the essential safeguard is that affected persons must be given notice if the authority intends to pass order on a date other than the one fixed. Ratio vs. Obiter: Ratio - The controlling principle is notice and opportunity to be heard rather than an administrative circular; passing an order after the date fixed without notice is invalid irrespective of the asserted timeline. Obiter - Specific interpretation of a three-day timeline as a rigid bar was not treated as the central ratio; the emphasis remained on notice and hearing. Conclusion: The impugned appellate order's delay in passing was not remedied by any proper notice to the petitioner; therefore, the delay contributed to the invalidity of the order and supports quashing and remand for fresh decision after hearing. Remedial direction and final conclusion Legal framework & reasoning: In light of the procedural infirmities (orders passed without fresh notice of later hearing dates and without providing personal hearing/rebuttal opportunity) and consistent High Court precedent, the appropriate remedy is quashing the impugned appellate order and remanding the matter to the appellate authority for fresh adjudication. Precedent treatment: The Court followed the prior High Court decisions and applied the same principles to the present record. Ratio vs. Obiter: Ratio - Where an adjudicatory or appellate order under the GST framework is passed without affording personal hearing or without re-notification when the order is to be passed after the fixed hearing date, the order is void and must be set aside; the matter should be remanded for a reasoned, speaking order after hearing. Obiter - Guidance that remand should be expeditious and unnecessary adjournments should be avoided. Conclusion: The impugned first appellate order is quashed; the matter is remanded to the first appellate authority to decide afresh after giving personal hearing and passing a reasoned order, preferably within three months from production of certified copy. Original records to be returned forthwith.