Purushottam Stores vs. The State Of Bihar

Facts

The petitioner, Purushottam Stores, challenged an appellate order dated 15.02.2023 passed by the Additional Commissioner of State Taxes (Appeal), Darbhanga Division. The appeal was dismissed for non-prosecution. The petitioner contended that the Appellate Authority was statutorily obliged to dispose of the appeal on merits, even in the absence of the appellant, citing a Supreme Court decision. The respondents argued that the grounds of appeal were considered by the Assessing Officer and reiterated by the Appellate Authority, and that the appellant consistently failed to appear. They also pointed to the availability of a further appeal to the GST Tribunal, which was yet to be constituted, and suggested a conditional relief of 20% deposit of the disputed tax amount.

Held

The Court held that the impugned appellate order dated 15.02.2023 was liable to be set aside. The reasoning was that the Appellate Authority failed to comply with the statutory mandate under Section 107 of the BGST Act, which requires appeals to be disposed of on merits after giving an opportunity of hearing. The Court found that the impugned order lacked substantive consideration of the grounds of appeal and was a peremptory dismissal for non-prosecution. The Court noted that the Supreme Court in S.Chenniappa Mudaliar emphasized that an appeal must be decided on merits, not merely dismissed for absence. The Court also observed that there was no efficacious alternate remedy available as the GST Tribunal was not yet constituted. The ratio decidendi is that statutory provisions mandating disposal of appeals on merits must be followed, and dismissal for non-prosecution without considering the merits is an abdication of statutory duty. The Court directed the Appellate Authority to restore the appeal, hear it on merits, and pass a speaking order within two months from the last hearing, irrespective of the appellant's absence on the date of hearing.

Key Issues

1. Whether the Appellate Authority, under Section 107 of the Bihar Goods and Services Tax Act, 2017, is statutorily obligated to dispose of an appeal on its merits, notwithstanding the absence of the appellant or lack of effective prosecution? (Question of law, turning on Section 107(11) and 107(12) of the BGST Act). Petitioner's contention: The Appellate Authority must decide the appeal on merits, as mandated by statute, even if the appellant is absent. Reliance was placed on the Supreme Court decision in Commissioner of Income Tax, Madras vs. S.Chenniappa Mudaliar, which held that appeals must be decided on merits and not dismissed for default. Respondent's contention: The grounds of appeal were considered, and the appellant's consistent absence justified the dismissal. The existence of a further appeal to the GST Tribunal (though not yet constituted) was noted, and a conditional relief was suggested.