GST Assessment Orders Valid Despite Later Registration Cancellation; 10% Pre-Deposit Required for Appeals Under Section 107

The HC dismissed the writ petition challenging monthly assessment orders issued under section 62 of CGST Act. The petitioner claimed orders were invalid as registration was canceled effective 31.12.2017, but the court noted cancellation application was submitted after assessments were issued. Having already filed appeals under section 107, petitioner failed to make the mandatory 10% pre-deposit. The court ruled that subsequent events (registration cancellation) cannot circumvent statutory pre-deposit requirements, and extraordinary remedy under Article 226 cannot be invoked after choosing the appellate path.

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Issues:
Challenge to monthly assessment orders under section 62 of the Central Goods and Services Tax Act, 2017 based on cancellation of registration and failure to furnish returns. Appeal against assessment orders and non-payment of mandatory pre-deposit for appeal.

Analysis:
The petitioner contested a series of monthly assessment orders issued under section 62 of the Central Goods and Services Tax Act, 2017. The orders were issued due to the petitioner's alleged failure to furnish returns despite notice under section 46 of the Act. The tax periods involved ranged from November 2017 to May 2019. The petitioner claimed that the assessment orders were illegal as they were issued after a request for cancellation of registration effective from 31.12.2017. The petitioner argued that the registration was indeed canceled by the Proper Officer as per Ext.P6, and hence, the assessment orders were unauthorized.

Upon examination, the court noted that the application for cancellation of registration was submitted after the assessment orders were issued. The petitioner had also filed appeals challenging the assessment orders under section 107 of the State Goods and Services Tax Act. However, a defect was identified as the mandatory pre-deposit of 10% was not made. The petitioner contended that the subsequent cancellation of registration would render the pre-deposit unnecessary, preventing prejudice due to loss of court fees. The court emphasized that once an appeal is initiated, subsequent events cannot be used to avoid mandatory pre-deposits as it would undermine statutory provisions. The liability for pre-deposit arises at the time of appeal filing and cannot be circumvented based on later developments beneficial to the petitioner.

Considering the above, the court held that since the petitioner had already pursued the appellate remedy, the appeal should proceed as per legal requirements. The court highlighted that the extraordinary remedy of Article 226 of the Constitution of India should not be invoked after opting for an appellate remedy. Consequently, the writ petition challenging the assessment orders was dismissed. The court emphasized the importance of adhering to statutory procedures and timelines in tax matters to maintain the integrity of the legal framework.

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