Whether passing ex-parte order after refusing to grant adjournment tenable?

PJ/Case Law/2018-2019/3494

Case: M/s KHANDELWAL EXTRACTIONS LTD
Citation: 2018-TIOL-189-HC-ALL-GST
Issue: Whether passing ex-parte order after refusing to grant adjournment tenable?
Brief facts: The petitioner is a manufacturer of vegetable oil. The petitioner filed an application under Section 97 of the Goods and Services Tax Act, 2017 Petitioner challenges the order dated 25.05.2018 passed by the Authority for Advance Ruling. Appellant had filed an appeal on 14.07.2018 against the order of the AAR and the AAAR had sent an e-mail on 20.09.2018 fixing the date of hearing on 26.09.2018 - although the receipt of the e-mail has not been denied by the petitioner-appellant, it is informed that due to holidays on 21, 22, and 23 September 2018, they became aware of the hearing date on 24.09.2018 and contending that the said time given to participate in the hearing is short and the counsel had some difficulty, they sought an adjournment by making an application by e-mail on 24/25.09.2018 to the AAAR - however, their request for adjournment was rejected and the appeal was decided ex-parte. The petitioner filed writ petition under High Court.
Appellant’s contention: Appellant contended that rejection of the adjournment on the first date fixed by the appellate authority is harsh and unreasonable. It cannot proceed to decide the appeal itself on merits. As per Section 101(2) of the Act, the appellate authority may decide the appeal within 90 days from being it filed. As per the contentions of appellant, no notice was issued for the first more than 60 days. The appellant was allotted short time to appear in the appeal and was not at fault seeking a short date/adjournment.
Reasoning of Judgment: It was held that rejection of the adjournment sought for the first date fixed by the Appellate Authority, that too when the Appellate Authority itself could not convene or could not hear the matter for the first 60 days of the period contemplated under Section 101 (2) of the Act, appears wholly harsh and unreasonable on the part of the Appellate Authority to have refused the short adjournment sought, and to have proceeded to decide the appeal itself on merits.
The petition was disposed off by the appellate authority on merits. However, after the writ has been filed to the High Court, it was directed by the court to remit the matter to the appellate authority and to decide the appellant appeal afresh, preferably within a period of two months from the date of production of certified copy of order given.
Decision:Writ allowed by way of remand.
Comment: According to proviso to section 107(9) of the CGST Act, 2017, pertaining to appeals to appellate authority, it is expressly stated that sufficient opportunity of hearing is required to be granted by the tax authorities and party can be granted adjournment three times. However, in this case, the appellate authority rejected the first adjournment and proceeded to decide the appeal on merits which is clear violation of the principles of natural justice and the statutory provisions contained in CGST Act, 2017. Consequently, the matter was remanded back to the appellate authority for decision afresh after considering the submissions of the appellant.
Prepared by: Himanshu Bhimani

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PJ/Case Law/2018-2019/3494

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