M/S Srm Enterprises vs. The State Of Bihar

Facts

The petitioners, M/s SRM Enterprises and its partner Navneet Kumar Sinha, challenged an ex parte order passed by the Additional Commissioner (Appeal), Darbhanga Division. The appeal was filed in time, but the Appellate Authority rejected it solely because the appellant sought time to produce supporting documents and failed to produce them despite being granted an opportunity. The petitioners are aggrieved by this rejection, which they contend was made without considering the merits of their case. The respondents include various state tax authorities and the State of Bihar.

Held

The Court held that the Appellate Authority has a statutory duty and obligation under Section 107 of the Bihar Goods and Services Tax Act, 2017, to look into the merits of the matter and examine the grounds raised by the appellant. This duty persists even if the appellant fails to produce documents after seeking time or does not appear for the hearing. The Appellate Authority cannot abdicate its powers by rejecting the appeal solely on the ground of non-production of documents or absence. The Court referred to its previous decision in Purushottam Stores vs. The State of Bihar & Ors., which emphasized the Appellate Authority's power to conduct further inquiries if necessary and decide on the points raised. The Court set aside the impugned ex parte order and directed the restoration of the appeal before the Appellate Authority. The petitioners are to appear on May 29, 2023, and the Appellate Authority is directed to fix a hearing date and dispose of the appeal on merits within three months from the last hearing date, ensuring a speaking order is passed even in the appellant's absence.

Key Issues

1. Whether the Appellate Authority, under the Bihar Goods and Services Tax Act, 2017, has a statutory duty to decide an appeal on its merits, even if the appellant fails to produce documents after seeking time, or if the appellant does not appear? This issue turns on the interpretation of Section 107, specifically sub-sections (8), (9), (10), (11), and (12) of the Act. Petitioner's Contention: The petitioner argued that the Appellate Authority must decide the appeal on merits, considering the grounds raised in the memorandum of appeal, as mandated by the statute. They relied on the High Court's previous decision in Purushottam Stores vs. The State of Bihar & Ors. Revenue's Contention: The learned Government Advocate highlighted Section 107(13) of the Bihar Goods and Services Tax Act, 2017, which suggests hearing and deciding appeals within a year if possible, but acknowledged that this does not dilute the mandate under sub-section (11) to pass an order on merit even in the absence of the appellant.