[Kerala High Court] Dismissal of GST Appeals Without Merits is Impermissible

Introduction

In a significant ruling concerning appellate procedures under the CGST Act, the Kerala High Court in St. Antony Trading and Transport (P.) Ltd. v. Joint Commissioner (Appeals)[i] reiterated that an Appellate Authority (‘AA’) cannot dismiss appeals solely on the ground of non-appearance of the Assessee. The Hon’ble High Court emphasized the mandatory duty of the AA to address the points raised in the appeal and deliver a reasoned decision on merits.

Brief Facts:

The petitioner i.e., St. Antony Trading and Transport (P.) Ltd. filed appeals against demand orders issued under s. 73 of the Central Goods and Services Tax Act, 2017 (‘CGST Act’) for the financial years 2020 – 21 and 2021 – 22. Despite being granted three opportunities to appear, the petitioner failed to attend the hearings. The AA consequently dismissed the appeals without formulating issues or offering any substantive reasoning, citing only the petitioner’s absence. Aggrieved, the petitioner approached the Hon’ble High Court under a. 226 of the Constitution of India.

Observations:

The Hon’ble High Court observed that:

• S. 107(12) of the CGST Act mandates that appellate orders must be in writing and state both the points for determination and the reasons for the decision.
• Dismissing an appeal for default without considering the merits amounts to a dereliction of statutory duty.
• Even in cases of non-appearance after three adjournments, the authority must proceed to determine the case on merits.
• Reliance was placed on Purushottam Stores v. State of Bihar and CIT v. Chenniappa Mudaliar[i], where similar principles were upheld—mere absence cannot override the duty to adjudicate on merits.

Consequently, the Court held that the impugned orders were perverse and liable to be set aside.

Analysis / Conclusion

This decision by the Hon’ble High Court serves as a vital judicial reminder of the non-negotiable procedural responsibilities vested in quasi-judicial appellate authorities under the CGST Act. The crux of the ruling lies in reaffirming that the right to appeal is not a mere formality but a substantive statutory remedy. The AA’s obligation goes beyond checking attendance and it must apply judicial mind to the grounds of appeal, assess facts, and issue a reasoned order in accordance with s. 107(12) of the Act.

Even in the absence of the appellant, the authority is not absolved from rendering a merit-based adjudication. The Court rightly observed that such dismissal orders not only defeat the purpose of appeal but also erode the taxpayer’s right to natural justice. This ruling also addresses a recurring concern in GST litigation i.e., the mechanical dismissals by AA’s citing procedural lapses. By declaring such an order as perverse, the High Court has set a clear benchmark that procedural convenience cannot override substantive justice. In essence, the judgment strengthens the jurisprudential framework of tax appeals by reiterating that adjudication must be reasoned, fair, and legally sound, even in the face of non-cooperation by appellants.

[I] [2025] 173 taxmann.com 512 (Kerala)
[II] [2023] 150 taxmann.com 480/98 GST 640/75 GSTL 276 (Patna)

Authored by Ascend Legal Editorial Team. The opinions expressed are personal and do not constitute any legal advocacy.