GST appeals cannot be dismissed for non-prosecution; appellate authorities must decide them on merits.

The Petitioner’s application for refund was rejected by the original authority.

It thereafter filed an appeal before the Appellate Authority under Section 107 of the Central Goods and Services Tax Act, 2017 (“CGST Act”). Despite three hearing notices, the Petitioner did not appear. The Appellate Authority dismissed the appeal for non-attendance and non-compliance and stated that the refund order was being confirmed “on merits”.

The Petitioner approached the Bombay High Court, contending that the Appellate Authority was statutorily required to decide the appeal on merits and issue a reasoned order under Sections 107(11) and 107(12) of the CGST Act.

Whether an Appellate Authority under Section 107 of the CGST Act may dismiss an appeal for non-prosecution or non-attendance instead of deciding it on merits

Whether the impugned appellate order complied with the requirement under Section 107(12) that an order disposing of an appeal must state the points for determination, the decision thereon, and the reasons for such decision

Section 107(11) of the CGST Act requires the Appellate Authority, after making such further inquiry as may be necessary, to pass an order confirming, modifying, or annulling the decision or order appealed against; dismissal for non-prosecution is not an option contemplated by the provision.

Section 107(12) requires the appellate order to be in writing and to state the points for determination, the decision thereon, and the reasons for the decision.

Relying on Arval India Private Ltd. v. Union of India, the Court held that an appeal under Section 107 must be decided on merits and cannot be dismissed merely for non-appearance.

The Court also relied on ASP Traders v. State of Uttar Pradesh, (2026) 2 SCC 641, for the principle that quasi-judicial tax orders must be reasoned and speaking orders, as failure to provide reasons undermines fairness and the statutory right of appeal.

The judgment in Arval India had, in turn, referred to the Supreme Court’s decision in Balaji Steel Re-rolling Mill v. Commissioner of Central Excise, concerning the absence of power to dismiss an appeal for want of prosecution where the governing appellate provision required adjudication of the appeal.

The Appellate Authority dismissed the Petitioner’s appeal solely because the Petitioner failed to attend the hearings, without examining the merits of the refund dispute.

The High Court held that Section 107(11) obliged the Authority to determine whether the original refund order should be confirmed, modified, or annulled, and that non-attendance did not authorise dismissal for non-prosecution.

Further, the statement that the appeal was decided “on merit” was unsupported because the order contained no points for determination, findings on those points, or reasons addressing the Petitioner’s case, contrary to Section 107(12).

The impugned order was therefore both procedurally impermissible and non-speaking.

The matter was remanded to the Appellate Authority with a direction to hear and decide the appeal on its own merits and in accordance with law.

The Petitioner was directed to remain present before the Appellate Authority on 8 September 2026 at 11:00 a.m. and cooperate with the proceedings; the Appellate Authority was permitted to fix the subsequent hearing schedule, and all merits-based contentions were kept open.