GST Appeal Procedure Validated: 10% Tax Deposit Mandatory, Petitioner Granted Time-Bound Process to Present Submissions

HC upheld the GST appeal procedure, requiring the petitioner to deposit 10% of the disputed tax amount as per Section 107(6). The court did not interfere with the first appellate authority's order but directed a time-bound appeal process, allowing the petitioner to present submissions while maintaining the earlier protection from recovery proceedings.

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Issues:
Challenge to order of Additional Commissioner Grade-2 (Appeal)-1 regarding maintainability of appeal without depositing 10% of disputed amount and rejection of application for interim relief.

Analysis:
The petitioner, a private limited company, challenged an order by the Assessing Officer holding them liable to pay tax under U.P. GST for the assessment year 2019-20. The petitioner had previously paid tax under the IGST Act and deposited the amount in Madhya Pradesh. The High Court granted liberty to file an appeal within two weeks and provided protection from recovery proceedings for five weeks. The impugned order dated 08.08.2024 was passed in pursuance of the High Court's order. The petitioner argued that the appeal was not decided on merits by the first appellate authority and that the 10% deposit requirement was arbitrary.

The first appellate authority found the appeal defective for not depositing 10% of the outstanding amount as required by Section 107(6) of the GST Act. The authority also noted that the High Court had not exempted the petitioner from this requirement and rejected the application for interim relief. The respondents opposed the writ petition, stating that the Division Bench had only interfered with recovery proceedings but not waived the statutory prescription. The court observed that only the interim relief application was rejected, while the appeal was still pending before the appellate authority.

The court decided not to interfere during the pendency of the appeal, allowing the petitioner to raise submissions before the appellate authority. It directed the appellate authority to decide the appeal within two months and allowed the respondents to file objections within four weeks. The petitioner agreed to cooperate in the proceedings, and the protection granted by the Division Bench would continue until final orders were passed. The court disposed of the petition with these directions and observations.

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