2024 (8) TMI 243 - HC - GST

Legal Challenge Succeeds: Tax Appeals Reinstated with Full Hearing Rights, Procedural Barriers Removed Under Section 107

HC allowed the writ petition challenging dismissal of tax appeals under Section 107 of WBGST/CGST Act. The Court set aside the appellate authority's ... Appeal dismissed on the ground of delay - petitioners did not make payment of the required pre deposit for maintaining an appeal - HELD THAT:- Admittedly, in this case a determination has been made by the proper officer under Section 73 of the said Act. The petitioners claim to be aggrieved by the same. Initially, the petitioner no.1 had preferred an appeal by depositing 1 per cent of the amount of tax in dispute. Admittedly, such appeal was filed beyond the time prescribed for preferring the appeal and the same was also not accompanied with the proper pre deposit for maintaining the appeal. The appeal was defective and was accordingly rejected without entering into the merits. Admittedly, therefore, the appeal filed by the petitioner no.1 on this occasion as well was out of time - there is no lack of bona fide on the part of the petitioners in preferring the appeal. The appeal filed on 6th October, 2023, which was rejected on 31st January, 2024, apart from being belatedly filed was defective as the amount required for pre deposit was not made. Following the same within five days, the subsequent appeal along with the required deposit was filed on 5th February, 2024. The appeal filed on 6th October, 2024 was a defective appeal. There has been no decision on merit. The petitioners do not stand to gain by filing a belated appeal. Since, the petitioners had already paid approximately 11 per cent of the amount of tax in dispute, i.e., more than the amount required for maintaining an appeal under Section 107(6) of the said Act, the matter is required to be remanded back to the appellate authority - Petition disposed off by way of remand. Issues:Challenge to orders passed by appellate authority under Section 107 of WBGST/CGST Act, 2017 for delay in payment of required pre-deposit for maintaining appeal.Analysis:The writ petition challenged orders passed by the appellate authority on 31st January 2024 and 28th May 2024 under Section 107 of the WBGST/CGST Act, 2017. The petitioner initially filed an appeal against an order dated 30th May 2023 under Section 73 of the said Act but only paid 1% of the tax amount in dispute instead of the required 10% for maintaining the appeal. Consequently, the appeal was dismissed for delay. The petitioner then filed another appeal on 5th February 2024 after making the full pre-deposit. However, this appeal was also dismissed by the appellate authority on the ground of delay, despite the petitioner's claim of a delay of only 1 month and 7 days. The Court noted that there was no decision on merits in either appeal.The petitioner's advocate argued that there was a genuine delay due to reasons beyond their control, requesting the Court to set aside the impugned orders and remand the matter for a fresh hearing on merits. On the other hand, the respondent's advocate contended that the subsequent appeal was not sanctioned by law and faulted the petitioners for not offering a proper explanation for the delay. The Court found that while the subsequent appeal was also out of time, there was no lack of bona fide on the part of the petitioners. The petitioners had paid more than the required amount for maintaining an appeal under Section 107(6) of the Act.Considering the above, the Court decided to remand the matter back to the appellate authority for a re-hearing on merits. The orders dated 31st January 2024 and 28th May 2024 were set aside. The Court clarified that it had not delved into the merits of the case, leaving all issues open for parties to raise before the appellate authority except for maintainability and limitation issues. The appellate authority was directed to decide the matter independently, without being influenced by the Court's observations. Since no affidavits were called for, the allegations in the writ petition were deemed not admitted by the respondents. The writ petition was disposed of, and parties were instructed to act based on the server copy of the order downloaded from the Court's official website.