Petitioner to pursue appeal; factual findings must precede vires challenge to Section 19(1) IGST and 77(1) CGST/SGST; pre-deposit stops recovery.

HC disposed petition and directed petitioner to pursue remedy by filing an appeal before the GST Tribunal, holding that factual determination must precede consideration of vires of Section 19(1) IGST and Section 77(1) CGST/SGST. Challenge to vires was left open. No further recovery proceedings shall be taken if authorities are satisfied the pre-deposit condition for filing appeal is complied with. Petitioner must deposit any IGST refunds received in respect of the transactions. As the Tribunal is not yet constituted, the appeal must be filed within three months of its constitution, to be decided on merits.

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Issues:
Petition seeking quashing of order passed by Appellate Authority for assessment year 2017-18; Treatment of supplies as intra-state instead of inter-state; Challenge to the vires of Section 19(1) of IGST Act and Section 77(1) of CGST and RGST Act of 2017; Compliance with interim order for depositing balance of CGST and RGST; Refund of IGST amount; Pre-deposit requirement for filing an appeal before GST Tribunal; Constitution of GST Tribunal.

Analysis:
The High Court addressed a petition seeking the quashing of an order passed by the Appellate Authority for the assessment year 2017-18. The petitioner claimed that the supplies made should be treated as inter-state supplies subject to IGST, while respondent No. 3 considered them as intra-state supplies and levied CGST and SGST instead. The petitioner also challenged the vires of Section 19(1) of IGST Act and Section 77(1) of CGST and RGST Act of 2017.

The Court noted that the petitioner had already deposited tax under the IGST Act. An interim order required the petitioner to deposit the balance of CGST and RGST, subject to refund of the IGST amount. The petitioner had received a partial refund, and the Court directed the petitioner to deposit the refunded amount with the State under RGST within a specified time frame.

The petitioner contended that the refund received from the Union of India regarding IGST had been deposited with the Goods & Service Tax Authorities, fulfilling the pre-deposit requirement for filing an appeal before the GST Tribunal. The Court, however, emphasized that factual determinations should be made first before delving into the vires of the provisions. Consequently, the petition was disposed of, allowing the petitioner to seek remedy through an appeal before the GST Tribunal.

The Court clarified that the challenge to the vires remained open. It also directed that no further recovery proceedings should be initiated against the petitioner if authorities were satisfied with the compliance of the pre-deposit condition for filing the appeal. The petitioner was instructed to deposit the refunded amount received on the transactions under IGST.

As the GST Tribunal was not constituted at the time, the petitioner was given three months from its establishment to file an appeal. The Tribunal would then assess the appeal on its merits after confirming compliance with the pre-deposit condition.

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