2022 (11) TMI 680 - HC - GST

Delayed Tax Appeal Reinstated: 20% Tax Deposit Ordered with Bond, Coercive Recovery Halted

HC allowed intra-court appeal challenging tax classification order. Despite 3.5-year delay, court found dismissal unjustified and directed restoration of ... Condonation of delay of a period of 3 and ½ years in filing present petition - appellant contend that the limitation would start to run only after a notification is issued constituting the Tribunal - HELD THAT:- Delay and laches are not to be calculated solely by the length of the time taken by the party to approach the legal forum. It is elementary principle that none stands to benefit by lodging an appeal or a petition belatedly. Unless and until there are material to show that owing to mala fide intentions and with certain ulterior motive, the petition was belated filed - it is found that there is no such allegation against the appellant. That apart, we also note that the appellant had deposited 10% of the disputed tax while filing an appeal before the first appellate authority and had the Tribunal been constituted and the appellant had filed an appeal before the Tribunal, it would have deposited further 20% of the disputed tax. The dispute being one of classification of goods manufactured and marketed by the appellant, an adjudication is required to be done for which unless the respondents file their affidavit, the Court will not be in a position to give a binding decision - this Court is of the view that the writ petition should be heard and decided on merits rather being rejected on the ground of delay and laches. However, to be entitled to such benefit, the appellant is put on certain conditions. The writ petition is restored to the file of this Court with a direction to the appellant to pay 20% of the balance disputed tax within a period of six weeks from the date of receipt of the server copy of this judgment - Appeal allowed. Issues:Challenge against order of appellate authority based on delay of filing, Applicability of limitation period, Classification dispute regarding product, Efficacy of appellate remedy before Tribunal, Delay and laches in approaching legal forum, Conditions for hearing writ petition, Compliance with payment conditions for entitlement to hearing, Coercive action for recovery of tax, penalty, and cess, Merits of the case not addressed in the appeal.Analysis:1. The judgment pertains to an intra court appeal challenging an order by the appellate authority dismissing a writ petition due to a delay of 3 and 1/2 years. The appellant argued that the limitation period should start upon the constitution of the GST Tribunal in West Bengal. The court did not accept this argument but found the dismissal solely based on delay unjustified.2. The court noted the dispute as a classification issue regarding the appellant's product, emphasizing the importance of the Tribunal as the final fact-finding authority. Since the Tribunal was not yet constituted, the appellant approached the High Court under Article 226 of the Constitution of India.3. Emphasizing that delay and laches should not be determined solely by the time taken to approach the legal forum, the court highlighted the absence of mala fide intentions in the appellant's actions. The appellant had also deposited a portion of the disputed tax during the appeal process, showcasing good faith.4. Given the need for adjudication on the classification issue, the court directed the respondents to file their affidavit for a binding decision. The court decided that the writ petition should be heard on merits rather than rejected based on delay, subject to certain conditions imposed on the appellant.5. The court allowed the appeal, restoring the writ petition to the court's file. The appellant was directed to pay 20% of the balance disputed tax within six weeks and furnish a bond for the remaining amount. Compliance with these conditions would entitle the appellant to be heard in the writ petition.6. The court specified that no coercive action could be taken against the appellant for recovery if the conditions were met. It was clarified that the judgment did not delve into the merits of the case. Finally, no costs were awarded, and urgent copies of the order were to be provided upon compliance with formalities.This detailed analysis of the judgment highlights the key issues addressed by the Calcutta High Court, the reasoning behind the decision, and the conditions imposed on the appellant for further proceedings in the writ petition.