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2019 (6) TMI 717 - BOMBAY HIGH COURTPrinciples of natural justice - decision based on ‘new grounds’, which were never raised before Advance Ruling Authority by the Revenue - vitiation of the decision making process - mutual exclusion of ‘job work’ and ‘manufacture’ - HELD THAT:- The Appellate Authority has actually faulted the petitioner for its alleged failure to submit certain agreements and documentary evidences, having a direct bearing upon the ‘new grounds’, upon which the Appellate Authority has finally based its decision. The absence of any indication by the Appellate Authority that it proposed to take into consideration the ‘new grounds’ or the failure on the part of the Appellate Authority to afford the petitioner an opportunity to produce documents or documentary evidences having direct bearing on the ‘new grounds’, in our opinion, amounts to failure on the part of the Appellate Authority to adhere to the principles of natural justice. Such failure, vitiates the decision making process and affords a good ground for interference in the exercise of powers of judicial review. The prejudice to the petitioner is quite evident in the facts and circumstances of the present case. The petitioner has been faulted for not providing documentary evidences during the appeal proceedings. There is again, no dispute, that the petitioner was never called upon to produce such documentary evidences in the course of appeal proceedings. In effect, this means that an order adverse to the interests of the petitioner has been made by the Appellate Authority, even after agreeing the petitioner that the primary reasoning of the Advance Ruling Authority 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, according to us, involves failure of natural justice, thereby vitiating the decision making process leading to the making of the impugned order dated 2nd July 2018. We are satisfied that the Appellate Authority should have at least indicated to the petitioner that it proposed to take into consideration the ‘new grounds’ and further, afford an opportunity to the petitioner to place on record agreements or other documentary evidences referred to in paragraphs 52 and 56 of the impugned order dated 2nd July 2018, in order to meet these ‘new grounds’. The failure to do so has not only resulted in violation of principles of natural justice, but also occasioned serious prejudice to the petitioner. We set aside the impugned order dated 2 July 2018 made by the Appellate Authority and remand the petitioner’s appeal to the Appellate Authority for reconsideration on its own merits and in accordance with law. Appeal disposed off.
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