2023 (7) TMI 249 - HC - GST

Taxpayer Challenges GST Order Amid Appellate Tribunal Absence, Seeks Relief with Partial Tax Deposit Under Section 107

The HC entertained a writ petition challenging a GST tax order due to the absence of a Second Appellate Tribunal. The petitioner contested the first ... Entertainment of writ petition in absence of second appellate tribunal - stay of tax demand during pendency of writ petition - verification of deposit as condition for interim relief - limited power of appellate authority to condone delay under statutory schemeEntertainment of writ petition in absence of second appellate tribunal - maintainability of writ as alternative remedy - Writ petition entertained because the Second Appellate Tribunal has not yet been constituted - HELD THAT: - The Court accepted jurisdiction to entertain the petition only on the ground that the statutory second appellate forum is non-existent at present. The petition challenges the first appellate authority's order refusing admission of the appeal; ordinarily a remedy by way of second appeal would lie, but in the absence of the second appellate tribunal the Court found sufficient cause to permit judicial scrutiny. The Court did not adjudicate the substantive tax liability or the merits of the first appellate order, but limited its entertainability determination to the factual circumstance that the second appellate forum is not constituted. [Paras 2, 3]Writ petition entertained as the Second Appellate Tribunal has not been constitutedStay of tax demand during pendency of writ petition - verification of deposit as condition for interim relief - Interim stay of the balance tax demand subject to verification of deposits made by the petitioner - HELD THAT: - As an interim measure and without deciding merits, the Court ordered that the remainder of the tax demand shall remain stayed during the pendency of the writ petition, conditioned upon verification of the petitioner's asserted deposit(s). The stay is expressly provisional and limited to the duration of the writ proceedings; the Court did not alter the statutory deposit requirements for preferring appeals before the appellate forums nor decide whether any condonation of delay is permissible. The stay reflects the Court's discretionary interim relief in the special circumstance of absence of the second appellate forum. [Paras 8]Balance of the demand stayed during pendency of the writ petition, subject to verification of depositFinal Conclusion: In view of non-constitution of the Second Appellate Tribunal the High Court entertained the writ petition and granted a limited interim stay of the remaining tax demand during the writ's pendency, conditional on verification of the petitioner's deposit; no adjudication was made on the substantive tax liability or on condonation of delay. The petition challenges the 1st appellate order dated 29.04.2023 which 'has not admitted the appeal' as contravening sub-sections (1) & (4) of Section 107 of the GST Act; the petitioner contends non-liability for tax and penalty and states 10% of the demanded tax was deposited before the first appellate authority and subsequently the entire tax demand has been deposited. The court entertained the writ because the Second Appellate Tribunal has not yet been constituted. The department argued delay in preferring the appeal cannot be condoned beyond four months, particularly since the 'appellate authority has not been vested with discretion to condone the delay beyond one month after lapse of three months from the date of communication of order impugned therewith.' Issue was noticed to the department; reply and rejoinder timelines fixed. As an interim measure, subject to verification of the asserted deposit, 'the rest of the demand shall remain stayed during the pendency of the writ petition.' I.A. disposed and matter listed further.