GST Appeal Remedy Must Be Exhausted Before Court Challenge Despite Impartiality Concerns Under Section 107

The HC disposed of a writ petition challenging tax demand and penalty under WBGST Act 2017. The court declined to rule on merits due to available statutory appeal remedy under Section 107. While acknowledging concerns about impartiality, the court directed petitioners to file appeal within one week, with appellate authority to decide within a fortnight. The State agreed to assign an impartial officer of equal rank to hear the appeal. Petitioners were permitted to request goods release before the appellate authority after making statutory deposit. The time spent on writ petition was protected from limitation period calculations.

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Issues:
1. Writ of Mandamus to set aside order of demand of tax and penalty.
2. Maintainability of writ petition due to alternative appellate remedy.
3. Dispute regarding ownership of goods and penalty imposition.
4. Appeal under Section 107 of the WBGST 2017 Act.
5. Benefit of pending writ petition on limitation period for appeal.
6. Directions for filing and disposal of appeal by the Appellate Authority.
7. Request for release of goods before the Appellate Authority.
8. Concerns about prejudiced decision-making in appeal process.
9. Assignment of appeal to an impartial officer.
10. Court refraining from entering merits of claims and counterclaims.

Analysis:
1. The writ petition sought a Mandamus to set aside the order of demand of tax and penalty dated March 9, 2022. The petitioners claimed to be engaged in business under the WBGST 2017 Act and were involved in a dispute regarding the interception and detention of goods by the respondents. The petitioners requested the release of the goods upon payment of penalty.

2. The State raised a preliminary objection on the maintainability of the writ petition, citing the availability of an alternative appellate remedy under the Statute. The State argued that the petitioners should approach the appellate authority for the release of goods, emphasizing the dispute over ownership of the goods as a crucial factor in the decision-making process.

3. The dispute over the ownership of the goods led to a discussion on the penalty imposition under Section 129(1)(b) of the WBGST 2017 Act, which contemplates separate penalties for the release of goods to the owner or persons other than the owner. The respondents expressed the need for prima facie satisfaction regarding the capacity in which the petitioners claimed the release of goods.

4. Section 107 of the WBGST 2017 Act allows aggrieved persons to appeal decisions or orders passed under the Act to the prescribed Appellate Authority. The order in question was deemed appealable, and the petitioners were within the time limit to file a writ petition, ensuring the benefit of the pending petition on the limitation period for appeal.

5. The Court directed the Appellate Authority to accept the appeal if filed within a week, considering the time spent on the writ petition. The Appellate Authority was instructed to dispose of the appeal promptly, within a fortnight of filing, after providing a hearing to the petitioner or their representative.

6. The petitioners were advised to comply with the procedures for filing an appeal, including the statutory deposit. They were also permitted to request the release of goods before the Appellate Authority, which would consider and decide on the matter after a hearing.

7. Concerns were raised about potential biased decision-making in the appeal process, prompting a request for an impartial officer to handle the appeal. The State assured that an officer of the same rank, excluding the concerned individual, would be assigned to decide on the appeal.

8. The Court refrained from delving into the merits of the claims and counterclaims presented by the parties, emphasizing that the judgment focused on procedural aspects and directions for the appeal process.

9. The writ petition was disposed of with the specified directions, without any costs imposed. The Court highlighted the importance of providing urgent certified copies of the order to the respective advocates upon compliance with formalities.

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