Sarada Comstruction And Anr vs. Assistant Commissioner State , GST And Ors

Facts

The appellants, Sarada Construction & Anr., filed a writ petition challenging an order dated December 7, 2020, passed by the Senior Joint Commissioner, Sales Tax, Raiganj Circle. This order dismissed their appeal against an assessment order dated June 20, 2019. The appellate authority dismissed the appeal ex parte, noting the appellants' failure to respond to a notice and provide a reasonable explanation for their non-appearance. The appellants contended they did not receive the notice, and the email notice was unknown to them. The learned Single Bench found a prima facie case for the appellants but did not grant a stay. The appellants are aggrieved by the issuance of a recovery notice and the threat to block their credit ledger. The High Court, in an intra-court appeal, considered the matter.

Held

The Court held that an appellate remedy is a valuable recourse for a dealer. Passing an ex parte order does not protect the interest of revenue as the matter is already under litigation and recovery processes would be delayed. The Court noted that the appellants had complied with the pre-condition of depositing 10% of the disputed tax at the time of filing the appeal. Therefore, the Court decided to remand the matter back to the appellate authority, subject to certain conditions. The order passed by the appellate authority on December 7, 2020, was set aside, and the appeal was restored to the file of the appellate authority to be decided on merits. The appellants were directed to deposit a further 10% of the disputed tax before the assessing officer within fifteen days, and upon receipt of proof of deposit, the appellate authority would proceed to hear the appeal on merits, uninfluenced by the previous ex parte order. The appellate authority was directed to issue a notice of hearing and afford a reasonable opportunity, and the appeal was to be disposed of expeditiously, preferably within six weeks from the conclusion of the personal hearing.

Key Issues

1. Whether the appellate authority erred in dismissing the appeal ex parte without affording a reasonable opportunity to the appellants, given their contention of non-receipt of notice and unfamiliarity with email communication (Question of mixed law and fact). Arguments for the appellants: The appellants argued that they did not receive the notice and were unaware of the email communication, hence their non-appearance was neither willful nor wanton. They contended that the appellate authority should have granted them another opportunity to be heard. Arguments for the respondents: The judgment does not explicitly record arguments made by the respondents (The Assistant Commissioner, State GST, Central Section, Bureau of Investigation, Unit – 4, Siliguri Zone & ors.) regarding the ex parte order. However, their appearance indicates they opposed the relief sought by the appellants.