2022 (12) TMI 1326 - HC - GST

Tax Appeal Vindicated: Insufficient Reasoning Leads to Remand, Ensuring Fair Hearing and Proper Examination of Delay Allegations

M/s. Shraddha Overseas Private Limited & Anr. Versus The Assistant Commissioner of State Tax, Chandni Chawk & Princep Street Charge & Ors.

HC allowed appeal challenging tax authority's order, condoning 33-day delay in filing. The court found the appellate authority's decision insufficiently ... Cancellation of registration of petitioner - Genuineness of the transaction going by the pay load of the vehicles, which was used for transporting the goods - HELD THAT:- The appellate authority straight away refers to the action taken by the tax authorities of Ultadanga wherein two separate enquiries were conducted in the business premises of M/s. Suraj Enterprise and the enquiry was conducted on 14th November, 2019 and 17th February, 2020. Admittedly, the transaction done by the appellant was in October, 2018. Thus, to conclude that the other end dealer is a non-existing dealer, there should be material to show that on the date when the appellants had transaction with him, there was no valid registration. If the cancellation of the registration of the other end dealer is by way of retrospective cancellation, then the question would be as to whether it would affect the transaction done by the appellants, more particularly when the appellants have been able to show that the payments for the transaction have been done through banking challans - The appellate authority was solely guided by the action taken by the Ultadanga tax authorities without examining the specific facts and circumstances of the case on hand. It is found that the order passed by the appellate authority to be a non-speaking order in the sense that there is no independent finding rendered by the appellate authority qua the allegation against the appellants. Therefore, it is a fit case where the matter should be remanded back to the appellate authority to specifically consider the contentions, which was advanced by the appellants and also the fact that the other end dealer’s registration was cancelled with retrospective effect - appeal allowed by way of remand. Issues:1. Application to condone delay in filing appeal.2. Challenge to order denying interim relief.3. Examination of facts and circumstances of the case.4. Allegations against the appellants.5. Consideration of cancellation of registration of other end dealer.6. Remand of the matter for fresh consideration.Analysis:1. The judgment begins with an application to condone a delay of 33 days in filing the appeal. The Court, after hearing both parties, accepts the reasons provided in the affidavit and condones the delay, allowing the application. No costs are imposed in this regard.2. The appeal in question challenges an order refusing interim relief sought by the writ petitioner. The Court notes that the appellate authority's order extensively detailed the factual background of the case. However, it points out that the authority's decision was primarily influenced by actions taken by tax authorities without a thorough examination of specific circumstances.3. The Court highlights that the appellate authority did not independently address the allegations against the appellants. It notes that the cancellation of the other end dealer's registration with retrospective effect raises questions about the validity of the transactions. The Court finds the appellate authority's decision lacking in detailed consideration of the contentions raised by the appellants.4. Consequently, the Court allows the appeal, along with the connected application and writ petition. It sets aside the order of the appellate authority and remands the matter for fresh consideration. The appellate authority is directed to provide an opportunity for a personal hearing to the authorized representative of the appellants. No costs are awarded in this decision.5. The judgment concludes by instructing the prompt issuance of a certified copy of the order upon request by the parties, subject to legal formalities. Both judges, T.S. Sivagnanam and Hiranmay Bhattacharyya, concur with the decision.