Appeal Cannot Be Dismissed for Non-Prosecution — Bombay HC Holds Appellate Authority Must Decide on Merits Under Section 107(11), Follows SC Ruling in ASP Traders

The Bombay High Court has quashed an appellate order that dismissed a refund appeal solely for the petitioner's non-attendance at hearings, holding that Section 107(11) of the CGST Act does not permit dismissal for non-prosecution and mandates that the appellate authority decide the appeal on merits. Justices M.S. Karnik and Sandesh D. Patil, in Writ Petition No. 3598 of 2026 (BA Continuum India Pvt. Ltd. vs. State of Maharashtra, decided 31.08.2026), restored the appeal for hearing on merits.

The petitioner's refund application had been rejected by the original authority. On appeal, the petitioner failed to appear despite three hearing notices. The appellate authority dismissed the appeal, recording that "non-attendance and negligence on the part of appellant shows that he is not interested in pursuing his appeal." The petitioner challenged this before the High Court, arguing that under Section 107(11) and (12), the appeal was required to be decided on merits.

The Court placed reliance on the Punjab and Haryana High Court's judgment in Arval India Private Ltd. vs. Union of India (CWP No. 24183 of 2025), which in turn had applied the Supreme Court's ruling in Balaji Steel Re-rolling Mills — holding that the appellate authority under a provision analogous to Section 35-C of the Central Excise Act does not have the power to dismiss an appeal in default or for want of prosecution. The Court also relied on the Supreme Court's decision in ASP Traders vs. State of Uttar Pradesh (2026) 2 SCC 641, which held that the right to appeal under Section 107 is predicated upon the existence of a formal adjudication and a reasoned, speaking order — any consequential action without such an order would be unsupported by authority of law, potentially violating Article 265 of the Constitution.

The Court observed that by the impugned order, the appeal was dismissed for non-prosecution when the provision required the appeal to be decided on merits in accordance with law. Moreover, the impugned order was not a reasoned order as required by Section 107(12). The appeal was remanded to the appellate authority for hearing and decision on its own merits.

•  2026-juristway.com-1256-HC(Bombay)-GST  |  High Court of Bombay  |  Writ Petition No. 3598 of 2026  |  31.08.2026