Appeal dismissed for paying Rs. 10,000 instead of required Rs. 20,000 statutory fee under Section 100(3)

The AAAR Haryana dismissed an appeal as not maintainable due to insufficient fee payment. The appellant was required to deposit Rs. 20,000 (Rs. 10,000 CGST + Rs. 10,000 HGST) as mandatory statutory fee under Section 100(3) of the GST Act for filing appeal against the Authority for Advance Ruling. However, the appellant paid only Rs. 10,000 (Rs. 5,000 CGST + Rs. 5,000 HGST) through challan dated 21.04.2023. The AAAR held the appeal incomplete and disposed it off for non-compliance with the statutory fee requirement.

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Issues Involved:

1. Whether tax is leviable on the monthly amount deposited by the occupier in the High Court's registry.
2. Determination of the liable party for tax payment, the applicable mechanism, and rate if tax is applicable.
3. Compliance with the procedural requirement for filing an appeal, specifically the payment of the requisite fee.

Issue-wise Detailed Analysis:

1. Tax Leviability on Deposited Amounts:

The primary issue revolves around whether the monthly amounts deposited by the occupier in the High Court's registry, and subsequently released to the appellant, are subject to GST. The appellant argued that the nature of these deposits is contingent on pending litigation regarding the property title and the relationship between the appellant and the occupier. The Advance Ruling Authority, however, determined that the activity falls under the "scope of supply" as per Section 7 of the CGST Act, 2017, thereby making it subject to GST under a forward charge mechanism. The appellant contended that the ruling was premature, as the courts have not yet adjudicated the nature of these deposits, which could be rent, use and occupation charges, or sale consideration.

2. Liability for Tax Payment:

If the tax is deemed applicable, the question arises as to who should bear this liability and under what mechanism. The Advance Ruling Authority concluded that the forward charge mechanism applies, implying that the appellant would be responsible for the tax payment. The appellant challenged this conclusion, arguing that no invoices could be raised for these deposits since they are made under court orders, not as a result of any service agreement between the parties.

3. Procedural Compliance for Appeal Filing:

The appeal's maintainability was questioned due to the appellant's failure to pay the full requisite fee for filing the appeal. According to Section 100(3) of the Act and Rule 106(1) of the CGST Rules, 2017, a fee of Rs. 20,000/- (Rs. 10,000/- each for CGST and HGST) is mandatory for filing an appeal. The appellant only deposited Rs. 10,000/-, rendering the appeal incomplete and not maintainable. Consequently, the appellate authority rejected the appeal on procedural grounds, emphasizing the statutory requirement for fee payment as a precondition for appeal acceptance.

Conclusion:

The appellate authority dismissed the appeal due to non-compliance with the fee payment requirement, without delving into the substantive issues regarding the taxability of the deposits. The appellant's arguments concerning the premature nature of the tax ruling and the inability to raise invoices under court-ordered deposits were not addressed due to the procedural dismissal. This highlights the critical importance of adhering to procedural prerequisites in legal proceedings.

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