2025 (11) TMI 1921 - HC - GST

Appeal Can't Be Dismissed Suo Motu For Exploring Amnesty Settlement; Order Quashed, Matter Remanded For Fresh Merits Decision

HC set aside the appellate authority's order dismissing petitioner's appeal when the petitioner had only sought adjournment to explore settlement under an ... Dismissal of appeal by the appellate authority - Appellant sought benefit of Amnesty Scheme - Seeking for adjournment of the appeal on the ground that the petitioner was desirous of settling the dispute under the Amnesty Scheme - HELD THAT:- This Court is of the view that the order impugned dated February 17, 2025 cannot be sustained. If the precondition for availing the Amnesty Scheme was withdrawal of the appeal filed by the petitioner, it was for the petitioner to exercise the option of withdrawal of the appeal and it was not open to the appellate authority to suo motu dismiss the appeal in absence of any prayer for withdrawal - Such a step could not have been taken by the appellate authority even with a view to help the petitioner for availing the Amnesty Scheme. There is a gulf of difference between withdrawal of an appeal (or a lis) by a party and dismissal thereof by an adjudicating authority on any ground other than prayer for withdrawal thereof by the party concerned. In case, the appellate authority wished to dispose of the petitioner’s appeal it was incumbent on the appellate authority to issue notice on the petitioner and call the petitioner for hearing and then take a reasoned decision on the appeal. In the case at hand, the appellate authority has hit the petitioner with a double whammy. Since the appeal has been dismissed and has not been withdrawn, therefore the petitioner would not be entitled to avail benefits of Amnesty Scheme and at the same time the petitioner has also lost the opportunity to press its appeal on merits. The order impugned, therefore, deserves interference. In such view of the matter, the order impugned dated February 17, 2025 is set aside and the matter is remanded to the file of the appellate authority for taking a fresh decision in the matter upon hearing the appeal on merits, in accordance with law. Petition allowed by way of remand. 1. ISSUES PRESENTED AND CONSIDERED 1.1 Whether an appellate authority under the WBGST Act, 2017/CGST Act, 2017 can dismiss an appeal suo motu, without adjudication on merits, solely to enable the appellant to opt for an Amnesty Scheme which requires prior withdrawal of the appeal. 1.2 Whether dismissal of an appeal by the appellate authority, without notice and hearing, in the name of facilitating an Amnesty Scheme, is consistent with the requirement of fair hearing and proper exercise of appellate jurisdiction. 2. ISSUE-WISE DETAILED ANALYSIS 2.1 Power of appellate authority to dismiss appeal to facilitate Amnesty Scheme Interpretation and reasoning 2.1.1 The Court noted that the Amnesty Scheme was operative till a specified date and that a condition precedent for availing its benefit was withdrawal of the pending appeal by the appellant. 2.1.2 The Court held that the option to withdraw the appeal rested exclusively with the appellant; the appellate authority could not assume such option on behalf of the appellant or treat non-withdrawal as a ground to dismiss the appeal. 2.1.3 The Court emphasised the clear distinction between (a) withdrawal of an appeal or lis by a party, and (b) dismissal of such appeal by an adjudicating authority on grounds other than a prayer for withdrawal by the concerned party. 2.1.4 Even if motivated by a perceived desire to benefit the appellant and facilitate recourse to the Amnesty Scheme, the appellate authority had no jurisdiction to reject the appeal ex parte solely for that purpose, particularly when there was no request from the appellant to withdraw the appeal. Conclusions 2.1.5 The appellate authority acted without authority and in an impermissible manner in dismissing the appeal ex parte to enable the appellant to exercise an option under the Amnesty Scheme. 2.1.6 The impugned order of dismissal, passed without any adjudication on merits and without any withdrawal by the appellant, could not be sustained in law and warranted interference. 2.2 Requirement of notice, hearing, and fair exercise of appellate jurisdiction Interpretation and reasoning 2.2.1 The Court observed that if the appellate authority intended to dispose of the appeal, it was incumbent to issue notice, call the appellant for hearing, and render a reasoned decision on the merits of the appeal. 2.2.2 By rejecting the appeal ex parte without going into the merits and without a hearing, the appellate authority deprived the appellant of its statutory right to have the appeal adjudicated. 2.2.3 The Court characterised the consequence as a 'double whammy' for the appellant: the appeal stood dismissed (and not withdrawn), thereby disentitling the appellant from the Amnesty Scheme which required withdrawal, while simultaneously extinguishing the appellant's opportunity to canvass the appeal on merits. Conclusions 2.2.4 The dismissal of the appeal without notice, hearing, and reasoned adjudication on merits was contrary to the proper exercise of appellate jurisdiction and principles of fair procedure. 2.2.5 The impugned appellate order dated February 17, 2025 was set aside on these grounds, and the matter was remanded to the appellate authority for fresh decision on the appeal on merits, in accordance with law and after hearing the appellant.