Natural justice requires a personal hearing before an appeal is dismissed for non-compliance with a pre-deposit direction.

Where an appeal is proposed to be disposed of for non-compliance with a pre-deposit direction under Section 35F, principles of natural justice require that the appellant be given a personal hearing before any adverse final order is passed. The cited Supreme Court ruling was confined to disposal of a stay application and did not justify dismissal of the appeal itself without hearing. Because the appeal was decided without affording that opportunity, the appellate order was unsustainable and was set aside, with the matter remitted for fresh disposal in accordance with law.

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Issues: (i) Whether an appeal could be dismissed for non-compliance with a pre-deposit direction under Section 35F without granting a personal hearing. (ii) Whether the impugned appellate order was liable to be set aside and the matter remanded for fresh consideration.

Issue (i): Whether an appeal could be dismissed for non-compliance with a pre-deposit direction under Section 35F without granting a personal hearing.

Analysis: Failure to comply with a pre-deposit direction, when the appeal itself is to be disposed of, attracted the requirement of hearing because the final order could operate prejudicially to the appellant. The position taken from the cited Supreme Court decision was limited to disposal of a stay application and did not authorise disposal of the appeal itself without hearing. The view of the Gujarat High Court, followed by the Tribunal in earlier decisions, supported the grant of a personal hearing in such matters.

Conclusion: The appeal could not be dismissed without affording a personal hearing to the appellant.

Issue (ii): Whether the impugned appellate order was liable to be set aside and the matter remanded for fresh consideration.

Analysis: Since the appellate authority disposed of the appeal without following the requirement of hearing, the order was unsustainable. The appropriate course was to set aside the order and remit the matter so that the appeal could be dealt with in accordance with law.

Conclusion: The impugned order was set aside and the matter was remanded to the appellate authority for fresh disposal according to law.

Final Conclusion: The assessee succeeded in getting the dismissal order quashed, and the appellate proceedings were sent back for reconsideration after due hearing.

Ratio Decidendi: Where an appeal is proposed to be disposed of for non-compliance with a pre-deposit direction, principles of natural justice require that the appellant be afforded a personal hearing before adverse final orders are passed.

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