Judicial Review Upholds Procedural Fairness: Input Tax Credit Appeals Dismissed with Directive for Timely Document Verification and Hearing

HC dismissed appeals challenging a Single Judge's order regarding input tax credit. The Court condoned delay in filing appeals and directed the appellant authority to verify documents, conduct a personal hearing, and adjudicate the dispute within four weeks. The Court emphasized procedural fairness without addressing substantive merits of the case, allowing respondents to present their arguments before the concerned authority.

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Issues:
Delay in filing appeals, constitutionality of Section 16(2)(c) of the CGST Act/WBGST Act, quashing of memos dated 28.08.2019 and 11.11.2019, granting of input tax credit, directions issued by the learned Single Judge, verification of documents, adjudication of the dispute, submission of additional documents, personal hearing, conclusion of proceedings.

Analysis:
The High Court of Calcutta, comprising Hon'ble Justice T.S. Sivagnanam and Hon'ble Justice Supratim Bhattacharya, addressed the issue of delay in filing appeals and condoned the delay after perusing the affidavit filed in support of the application. The Court found sufficient cause for the delay and allowed the application for condonation of delay. The appeals were directed against a common judgment and order passed by the learned Single Judge, where the respondents/writ petitioners sought a writ of declaration to declare Section 16(2)(c) of the CGST Act/WBGST Act as unconstitutional. The respondents also sought the quashing of memos dated 28.08.2019 and 11.11.2019. The Court noted that the direction issued by the learned Single Judge was considered innocuous, and the appeals were preferred by the State on the grounds of prematurity of the writ petition and pending challenges to the constitutional validity of the provision.

Regarding the input tax credit, the Court observed that the only reason for denying the credit was the retrospective cancellation of the selling dealers' registration. While the larger relief sought by the respondents was not granted by the Single Judge, the Court found that the directions issued were in the interest of both the respondents and the revenue. The matter was sent back to the appellant authority for verification of documents and correspondence to enable the actual adjudication of the dispute, emphasizing the need for proper adjudication before deciding on the input tax credit.

The Court concluded that no interference was warranted with the directions issued by the learned Single Judge. Both appeals were dismissed with a direction for the respondents/writ petitioners to submit an additional set of documents within two weeks to the concerned appellant authority. The authority was instructed to afford a personal hearing to the authorized representative of the respondents, peruse the documents, and act on merits in accordance with the law, aiming to conclude the proceedings expeditiously within four weeks from the date of the personal hearing. It was clarified that neither the writ court nor the High Court had adjudicated the merits of the case, allowing the respondents to present all factual and legal issues before the concerned authority. Consequently, all connected applications to the appeals were dismissed, and no costs were awarded.

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