GST Adjudication Order Challenge: Petitioner Must File Statutory Appeal Within 15 Days, Comply with Pre-Deposit Rules

HC ruled on a GST adjudication order challenge under Section 73(9). The court directed the petitioner to file a statutory appeal within 15 days with the Appellate Authority, emphasizing the need to comply with pre-deposit requirements. While acknowledging potential financial constraints, the HC mandated merit-based appeal hearing, disposing of the writ petition without imposing costs.

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Issues:
Challenging adjudication order under Section 73 (9) of the West Bengal GST/CGST Act, 2017 dated 29th January, 2024.

Analysis:
The writ petition was filed to challenge the adjudication order passed under Section 73 (9) of the West Bengal GST/CGST Act, 2017. The petitioner was served a show-cause notice highlighting discrepancies regarding Input Tax Credit (ITC) availed in excess and the proposal for reverse of ITC. The petitioner claimed that it is only responsible for maintaining records and returns, not liable if the supplier fails to meet obligations. The petitioner cited a judgment in support. The proper officer passed the adjudication order after a personal hearing, covering the tax period April 2018 to March 2019. The petitioners contended that no records were called for before passing the order, and it was mechanical. They argued against the efficacy of the appeal due to the need to deposit 10% of the disputed tax amount, especially considering their financial position and the absence of current business operations.

The respondents argued that the petitioner has an efficacious remedy in the form of a statutory appeal. They criticized the vagueness of the petitioner's response to the show-cause notice, lacking in particulars. The proper officer had provided an opportunity for a hearing before passing the order. The court noted that the challenge was to an adjudication order for the tax period April 2018 to March 2019. While the respondents claimed no irregularity in the order due to lack of disclosure by the petitioner, the court emphasized the availability of a statutory appeal. It allowed the petitioner to approach the Appellate Authority without delving into the adequacy of the petitioner's explanation to the show-cause notice.

The petitioner's argument about financial constraints hindering the appeal's efficacy lacked substantiation on record. The court highlighted the necessity of a pre-deposit for the statutory remedy of appeal, indicating that the petitioner cannot maintain an appeal without fulfilling this requirement. Despite the writ petition being pending for some time and the appeal filing period expiring, the court directed the petitioner to file an appeal within fifteen days from the order date with the Appellate Authority. The Appellate Authority was instructed to hear the appeal on merits, subject to other formalities. The writ petition was disposed of with no costs imposed, and parties were directed to receive certified copies of the order upon compliance with formalities.

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