Natural justice requires a hearing before dismissing an appeal for non-compliance with a stay direction.

Non-compliance with a stay or pre-deposit direction does not by itself justify dismissal of an appeal without observing natural justice. The appellate authority must afford the assessee an opportunity of hearing and independently consider the issues before final disposal. As no further hearing was granted and the merits were not separately addressed, the dismissal was held unsustainable and the matter was remitted to the Commissioner (Appeals) for fresh disposal after hearing the assessee.

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Issues: Whether the appeal could be dismissed for non-compliance with the stay order without affording the assessee an opportunity of hearing before final disposal.

Analysis: The dismissal of the appeal was based on non-compliance with the stay direction, but the record did not show that the appellate authority had independently discussed the issues or granted a further opportunity of hearing before passing the final order. The settled legal position applied was that failure to comply with a pre-deposit or stay direction does not justify dismissal of the appeal without observing the requirements of natural justice and hearing the assessee.

Conclusion: The dismissal was unsustainable for want of opportunity of hearing, and the matter had to be remitted to the Commissioner (Appeals) for fresh disposal after hearing the assessee.

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