Calcutta HC: Appellate Authority must pass speaking order under GST even ex-parte

1. Executive Summary

GST appeals are a critical safeguard for taxpayers, especially when faced with adverse orders like registration cancellation. But what happens if you miss your hearing? Can the appellate authority simply rubber-stamp the lower order without addressing your written arguments? The Calcutta High Court has made it clear: even if an appeal is heard ex-parte (without the appellant’s presence), the appellate authority must pass a “speaking order”—one that addresses the grounds raised in writing and explains the reasoning. Mere mechanical affirmations are not just unfair—they’re legally invalid.

Key Takeaways for Taxpayers, CFOs, and Practitioners

• Written Grounds Matter: Your arguments in Form GST APL-01 must be considered by the appellate authority, even if you’re absent at the hearing.
• No Rubber-Stamping: An ex-parte order must still be a “speaking order”—it cannot simply echo the lower authority’s decision without independent reasoning.
• Natural Justice Prevails: The appellate authority’s duty to apply its mind and address all grounds is a matter of legal obligation, not mere formality.
• Practical Safeguards: Well-drafted grounds of appeal and prompt challenges to non-speaking orders are your best defence against adverse GST consequences.

2. Introduction

Reasoned orders are the backbone of fair adjudication in GST appeals. When an appellate authority passes a “speaking order,” it not only upholds the law but also reinforces the taxpayer’s right to be heard—even if that hearing happens only on paper. Unfortunately, a growing trend of non-speaking, ex-parte affirmations threatens this principle. Many taxpayers find their appeals dismissed with a single line, without any discussion of the grounds they painstakingly set out in their appeal memo.

This article aims to clarify the legal obligation of appellate authorities to pass reasoned orders under Section 107 of the GST Act, even when the appellant is absent. By understanding the distinction between an ex-parte hearing (where the case is decided on merits based on the record) and a dismissal for default (where the appeal is thrown out for non-appearance), you can better safeguard your rights and ensure your appeal is properly adjudicated.

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3. Case Law in Focus

The Calcutta High Court’s decision in Shatrughan Shaw v. Assistant Commissioner of State Tax (2025) is a timely reminder that appellate authorities under GST cannot abdicate their quasi-judicial responsibilities, even when the appellant is absent. Let’s break down the case and its wider implications for GST appeals.

3.1 Factual Matrix

The petitioner, a registered taxpayer, had voluntarily applied for cancellation of his GST registration after ceasing business. Instead of accepting this, the department issued a cryptic, one-line show cause notice proposing retrospective cancellation and then passed a cancellation order. The taxpayer challenged this by filing an appeal under Section 107, raising specific grounds—most notably, the vagueness of the SCN and breach of natural justice.

However, the petitioner failed to appear for the scheduled appellate hearing. The appellate authority, proceeding ex-parte, simply affirmed the original cancellation order. Crucially, the appellate order did not discuss or even reference the written grounds of appeal. It was, in effect, a “rubber-stamp” of the lower authority’s decision.

3.2 The Issue: Is an Ex-Parte, Non-Speaking Affirmation Valid?

The central question before the High Court was whether the appellate authority could lawfully dispose of an appeal by a non-speaking order—one that neither addresses the written grounds nor provides any independent reasoning—merely because the appellant was absent.

3.3 Judicial Analysis & Decision Highlights

The High Court’s analysis was clear and unequivocal:

• Duty to Apply Mind: The appellate authority, as a quasi-judicial body, is bound to consider the grounds of appeal on record, even if the appellant does not appear in person. The written submissions are not to be ignored.
• Obligation to Pass a Speaking Order: The law requires a “speaking order”—one that sets out the authority’s reasoning, deals with each ground raised, and demonstrates application of mind. This is not a technicality but a core aspect of natural justice.
• Invalidity of Rubber-Stamp Orders: Simply echoing the lower authority’s order, without independent analysis or reference to the appellant’s arguments, is not just improper—it renders the appellate order legally unsustainable.

3.4 Impact: Matter Set Aside and Remanded

Recognising these failures, the High Court set aside the appellate order and remanded the matter for fresh consideration. The appellate authority was directed to decide the appeal on merits, after properly considering the written grounds—even if the appellant remains absent.

This ruling is not an isolated one. The Court relied on its earlier decision in Ed and F Man Commodities India Pvt. Ltd. v. ACST, which had similarly emphasised the necessity of reasoned, speaking orders in GST proceedings.

4. Legal Principles & Minimum Requirements

The Calcutta High Court’s ruling is rooted in both statutory mandate and the broader principles of natural justice. Here’s what every taxpayer and practitioner should know:

4.1 What Is a “Speaking Order” Under Section 107, GST Act?

A “speaking order” is one that clearly sets out the reasons for the decision, addresses all material grounds raised by the appellant, and shows that the authority has applied its mind to the facts and law. Under Section 107, the appellate authority is required to examine the appeal “with such further evidence as may be necessary” and “pass such order as it thinks fit, confirming, modifying or annulling the decision or order appealed against.” For practical litigation support, you may explore GST Litigation Services.

4.1.1 Statutory Basis & Case Law Guidance

• Section 107(11), CGST Act: Mandates that the appellate authority “shall, after making such further inquiry as may be necessary, pass such order as it thinks fit, confirming, modifying or annulling the decision or order appealed against.”
• Case Law: Both Shatrughan Shaw and Ed and F Man Commodities stress that this power is not mechanical. The order must reflect consideration of the grounds and evidence.

4.1.2 Essential Elements of a Valid Speaking Order

• Reasoning: The order must explain why the authority is deciding as it is—not just what it is deciding.
• Addressing All Grounds: Every material ground raised in the appeal memo must be discussed, even if briefly.
• Clarity: The order should be understandable to the parties and, if challenged, to a reviewing court.

4.2 Obligations of Appellate Authority When Appellant Is Absent

4.2.1 Duty to Decide on Merits vs. Dismissal for Default

Unlike civil courts, GST appellate authorities are generally not empowered to dismiss an appeal “for default” (i.e., for non-appearance alone). Instead, they must decide the case on merits, based on the record—including the written grounds of appeal.

4.2.2 Distinction: Ex-Parte Hearing vs. Summary Dismissal

• Ex-Parte Hearing: The authority proceeds in the appellant’s absence but must still consider all written submissions and pass a reasoned order.
• Dismissal for Default: The appeal is thrown out solely for non-appearance, without examining the merits. This is not the norm under GST and is generally impermissible.

Why This Distinction Matters

If your appeal is dismissed for default, you may lose your right to have your case considered on merits. If it is decided ex-parte but with a speaking order, you retain the right to challenge the reasoning or outcome. This is why robust written grounds and vigilance against non-speaking orders are so important.

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5. Recognizing and Challenging Non-Speaking, Ex-Parte Appellate Orders

The difference between a valid ex-parte order and a defective, non-speaking one is not always obvious at first glance. For taxpayers, CFOs, and GST practitioners, spotting these red flags early can make all the difference in protecting your rights and avoiding adverse GST consequences.

Red Flags for Non-Speaking or Rubber-Stamp Orders

A non-speaking, ex-parte appellate order typically shows one or more of these warning signs:

• No Discussion of Grounds: The order does not mention or address the specific grounds raised in your Form GST APL-01.
• Absence of Reasoning: There is no explanation of why the authority is confirming, modifying, or annulling the lower order—just a bare affirmation.
• Copy-Paste Language: The order simply repeats the findings or language of the original adjudicating authority, without any independent analysis.
• No Reference to Evidence or Record: The appellate authority does not refer to documents, facts, or legal arguments on record.
• One-Line Dismissal: The order is limited to a single sentence or paragraph, such as “The appeal is dismissed as the appellant did not appear,” without more.

If you spot any of these, you are likely dealing with a non-speaking, rubber-stamp order that is open to challenge.

6. Actionable Strategies for Appeals

A proactive approach—both at the drafting stage and after receiving an order—can make all the difference in GST appellate proceedings.

6.1 Drafting Robust “Grounds of Appeal” in Form GST APL-01

Your written grounds are your strongest shield, especially if you are unable to attend the hearing. Here’s how to make them count:

• Be Comprehensive: List every factual and legal ground you wish to contest. Don’t assume you’ll get a chance to elaborate orally.
• Cite Law and Precedent: Reference relevant sections of the GST Act, rules, and key case law (such as Shatrughan Shaw and Ed and F Man Commodities). Our GST Audit Services can also help ensure your compliance and documentation is robust.
• Highlight Natural Justice: Explicitly state if you believe there has been a violation of natural justice (e.g., vague SCN, lack of opportunity to be heard).

6.2 Immediate Remedies If Faced With a Deficient Ex-Parte Order

If you receive a non-speaking, ex-parte appellate order, act quickly:

• File a Representation or Application for Remand: Point out the absence of reasoning and the failure to address your written grounds. Request that the matter be remanded for fresh adjudication on merits.
• Approach the High Court (Writ Petition): If the appellate authority does not rectify the defect, you may file a writ petition citing violation of natural justice and the binding precedents.

6.3 FAQs for Taxpayers and Advisors

Q1: If I miss my GST appeal hearing, will my case be dismissed outright?
No. The appellate authority must decide your case on merits, based on the written record. Dismissal for default is not the norm under GST.

Q2: What if the appellate order does not discuss my grounds of appeal?
Such an order is non-speaking and can be challenged as being contrary to law and natural justice.

Q3: Can I still get relief if I did not attend the hearing?
Yes. As long as your written grounds are on record, the authority must consider them. If not, you can seek remand for fresh adjudication.

Q4: What case laws should I cite in my challenge?
*Refer to the Calcutta High Court’s rulings in *Shatrughan Shaw v. ACST* and Ed and F Man Commodities India Pvt. Ltd. v. ACST for authoritative support.*