Duty Of Appellate Authority To Look Into Explanations Given By Assessee: Calcutta HC

The Calcutta High Court has held that it is the duty of appellate authority to look into explanations given by assessee. The bench of Justice Om Narayan Rai has observed that explanations given by the appellant could have very well rejected the explanations, if the same were not acceptable in law or fact but there should be reasoned. In the case at hand there is none. Similarly there is no consideration of the documents already on record. At least the order impugned does not reveal so. The dispute arose from an adjudication order dated April 3, 2024, passed under Section 73 of the WBGST Act, 2017/CGST Act, 2017 for the tax period April 2018 to March 2019. The adjudicating authority had held the petitioner liable on 4 counts: Short payment of outward tax; Short payment of tax on inward supplies under Reverse Charge Mechanism (RCM); Excess availment of Input Tax Credit (ITC) on inward supplies; and ITC found reversible Aggrieved by the adjudication order, Fratelli Vineyards Limited preferred an appeal under Section 107 of the Act before the appellate authority. The company contended that it had already furnished all relevant documents and detailed explanations before the adjudicating authority and reiterated its grounds in the appeal. However, by an order dated June 17, 2025, the appellate authority confirmed the adjudication order. In doing so, it repeatedly observed that no further explanation or supporting documents had been furnished at the appellate stage and therefore found no reason to interfere with the findings of the adjudicating officer. Appearing for the petitioners, Mr. Himangshu Kumar Ray argued that the appeal memorandum clearly contained detailed grounds challenging each finding of the adjudicating authority. He submitted that the appellate authority failed to consider the explanations already on record and mechanically affirmed the original order without examining the merits of the case. He further contended that the documents submitted before the adjudicating authority were sufficient for a proper adjudication if evaluated in light of the grounds raised in appeal. Counsel for the State, Mr. Saptak Sanyal, offered little resistance to the petitioner’s submissions. The High Court found that the appellate order did not demonstrate any independent application of mind. Justice Rai observed that the appellate authority merely paraphrased the findings of the adjudicating authority and glossed over the explanations furnished by the appellant. The Court noted that the repeated use of identical language at the end of each finding—stating that no further explanation had been furnished—reflected a mechanical approach. It held that such repetition, without examining the grounds and documents on record, rendered the order uninformed and vulnerable to judicial review. Importantly, the Court emphasized that when explanations are placed before an appellate authority, it is incumbent upon the authority to examine them, assess their merit, and provide reasons for accepting or rejecting them. Even if the explanations are ultimately found untenable, the order must disclose reasons. In the present case, the High Court found no discussion of the explanations or documents already on record. On the ground of non-application of mind alone, the High Court set aside the appellate order dated June 17, 2025. The matter was remanded to the appellate authority for fresh consideration on merits, in light of the documents already on record and upon proper consideration of the grounds raised in the appeal. The Court clarified that it had not examined the merits of the tax demand itself and left it open for the appellate authority to decide the matter in accordance with law. The writ petition was accordingly disposed of without any order as to costs. Case Details Case Title: Fratelli Vineyards Limited formerly known as Tinna Trade Limited & Anr. Vs. The State of West Bengal & Ors. Citation: JURISHOUR-89-HC-2026(Cal) Case No.: WPA 24054 of 2025 Date: 23/02/2026 Counsel For Appellant: Himangshu Kumar Ray, Advocate Counsel For Respondent: Saptak Sanyal, Adv. Click Here To Read Order Read More: Overlapping Pay Benefits Under 2006 Rules Must Be Deducted from Motor Accident Compensation: Supreme Court

Duty Of Appellate Authority To Look Into Explanations Given By Assessee: Calcutta HC

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