Principal of natural justice — Appeal against the Appellate authority for Advance ruling – The petitioner challenged the orders dated 5 March 2018 made by the Maharashtra AAR and order dated 2 July 2018 made by the Maharashtra AAAR. The petitioner engaged in the business of generation and sale of electricity proposed to enter into an arrangement for conversion of coal and other inputs into electricity and conversion of electricity into Steel on job work basis. It sought an advance ruling as to the said work qualifies under Job work defined u/s 2(68) and consequently whether the petitioner is entitled to benefits under the Act. The AAR vide order dated 5 March 2018 ruled that the proposed arrangement did not qualify as ‘job work’ primarily because the same amounted to ‘manufacture’ as defined under Section 2(72). The petitioner appealed against this order to the Appellate Authority, who vide its order dated 2nd July 2018 disagreed with the reasoning of AAR that the proposed arrangement did not amount to ‘job work’ because the same amounted to ‘manufacture’. However, the Appellate Authority upheld the ultimate conclusion of AAR relying upon two different and distinct grounds. The petitioner submitted that the Statute has provided for no further appeal against the orders of Appellate Authority, however, reasoning of the Appellate Authority in the context of new grounds is contrary to statutory provisions as well as judicial precedents. The Court observed that an order adverse to the petitioner has been made by the Appellate Authority, even after agreeing that the primary reasoning of the AAR was not proper, without affording the petitioner opportunity to meet with or to clarify or to produce materials or documentary evidences which might have had a bearing on the ‘new grounds’ ultimately relied upon by the Appellate Authority. This involves failure of natural justice.
Held that:- The Hon’ble High Court set aside the order dated 2 July 2018 made by the Appellate Authority and remanded the appeal to the Appellate Authority for reconsideration on its own merits and in accordance with law.—Jsw Energy Limited Vs. Union of India And Ors. [2019] 13 TAXLOK.COM 009 (Bombay)