Challenge allowed in part; matter sent back to appellate authority as full WBGST recovery removes need for 2.5% deposit requirement

HC allowed challenge in part and remanded the matter to the appellate authority for decision on merits, holding that because the entire WBGST tax demand has already been recovered from the petitioner there is no requirement to make the 2.5% deposit. The court found the scheme permits belated appeals if preconditions are met; the appellate authority had found all preconditions satisfied except the deposit. As the recovered WBGST equated to 50% of the demand, the petition was disposed of by remand.

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The issues presented and considered in the judgment are as follows:1. Whether the petitioner's appeal, challenging the order passed by the appellate authority under Section 107 of the Central/West Bengal Goods and Services Tax Act, 2017, should be allowed despite the petitioner's failure to pay the required pre-deposit amount of 2.5% of the disputed tax by debiting the electronic cash ledger.Issue-Wise Detailed Analysis:The court considered the relevant legal framework under the Central/West Bengal Goods and Services Tax Act, 2017, particularly Section 107 and Section 74, which govern the appellate process and pre-deposit requirements for filing appeals. The court noted that the petitioner did not take any steps after the final assessment and only filed an appeal to take advantage of a scheme allowing time-barred appeals to be filed under certain conditions.The court interpreted the scheme notified on 2nd November, 2023, which required the payment of a pre-deposit amount of 2.5% of the disputed tax by debiting the electronic cash ledger. The court found that the petitioner did not fulfill this requirement, leading to the rejection of the appeal as barred by limitation. However, the court considered the arguments presented by both parties regarding the payment of the disputed tax amount.Key evidence and findings included the acknowledgment by the State respondents that the entire amount of tax subject to the appeal had already been realized from the petitioner. The court analyzed the scheme's provisions and the petitioner's compliance with the pre-deposit requirement.The court concluded that since the entire amount of tax on account of WBGST had been recovered from the petitioner, there was no need for further deposit of 2.5%. The court emphasized that the petitioner had fulfilled all other preconditions for maintaining the appeal and remanded the matter back to the appellate authority for a decision on merits.Significant Holdings:The court held that the order dated 28th June, 2024, was set aside, and the matter was remanded back to the appellate authority for a decision on merits. The core principle established was that the fulfillment of preconditions for maintaining an appeal, including the payment of a pre-deposit amount, should be considered in light of the total tax amount already recovered from the taxpayer.In conclusion, the court disposed of the writ petition with the direction to provide an urgent certified copy of the order to the parties upon compliance with formalities.

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