M/S Sidh Hanuman Enterprises Through Its Proprietor Namely Pulkit Agarwal vs. The State Of Jharkhand Thro Its Secretary Department Of State Tax

Facts

The petitioner, M/s Sidh Hanuman Enterprises, filed a writ petition challenging an ex-parte appellate order dated July 18, 2023, and a consequential Form GST APL-04 dated July 22, 2023, passed by the Additional Commissioner, State Tax (Appeal), Dhanbad Division. This appellate order rejected the petitioner's appeal against an adjudication order dated February 22, 2022, passed by the State Tax Officer, Dhanbad Circle. The petitioner contended that the appellate order was passed without granting a proper opportunity of hearing and without considering the merits of the case. The adjudication order, passed under Section 74 of the Jharkhand Goods and Service Tax Act, 2017, fastened tax, interest, and penalty upon the petitioner in alleged violation of principles of natural justice and statutory provisions.

Held

The Court held that the appellate order dated July 18, 2023, is unsustainable because it was passed ex-parte without assigning any reasons and without considering the merits of the case. The Court emphasized that reasons are essential for any judicial or quasi-judicial decision, as they ensure objectivity, prevent arbitrariness, and facilitate judicial review. Citing the Supreme Court's judgment in Kranti Associates Pvt. Ltd., the Court reiterated that the requirement to record reasons is a fundamental aspect of fairness and natural justice. The appellate authority's failure to provide reasons, even when the assessee fails to appear, amounts to a denial of justice. Consequently, the impugned appellate order was quashed and set aside. The matter was remanded back to the Appellate Authority to proceed de novo, pass a reasoned and speaking order after providing the petitioner with due opportunity of hearing, and decide the appeal expeditiously by December 31, 2025. The adjudication order was not directly addressed on its merits, as the primary focus was on the procedural infirmity of the appellate order.

Key Issues

1. Whether the ex-parte appellate order dated July 18, 2023, passed by the Additional Commissioner, State Tax (Appeal), Dhanbad Division, is liable to be quashed for being passed without granting a proper opportunity of hearing to the petitioner and without considering the merits of the case, thereby violating principles of natural justice? 2. Whether the adjudication order dated February 22, 2022, passed by the State Tax Officer, Dhanbad Circle, under Section 74 of the JGST Act, 2017, is illegal and arbitrary for being passed in violation of principles of natural justice and statutory provisions (Sections 73, 74, and 75 of the JGST Act)? Petitioner's Arguments: The petitioner argued that the appellate authority confirmed the assessing authority's order solely on the ground of the petitioner's non-appearance, without assigning any reasons or entering into the merits of the case. This failure to provide reasons and an opportunity to be heard violates the principles of natural justice and renders the order unsustainable. The petitioner relied on the principle that reasons are the heartbeat of every conclusion and that an order without valid reasons cannot be sustained. Revenue's Arguments: The judgment does not record any specific arguments made by the respondents (revenue).