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1. ISSUES PRESENTED AND CONSIDERED
1.1 Whether an appeal under the GST regime can be rejected solely on the ground of non-payment of pre-deposit without affording the appellant an opportunity to make the requisite pre-deposit.
1.2 Whether, in a case involving disallowance and recovery of Input Tax Credit, a quantified amount mentioned in the show cause notice attracts the statutory requirement of pre-deposit at the appellate stage.
2. ISSUE-WISE DETAILED ANALYSIS
Issue 1 & 2: Rejection of appeal for non-payment of pre-deposit in an ITC disallowance matter; requirement and opportunity to make pre-deposit
Interpretation and reasoning
2.1 The Court noted that the show cause notice specifically quantified the ITC proposed to be disallowed and recovered, clearly computing the amount at Rs. 61,36,720/-, along with consequential proposals for recovery, interest, and penalty.
2.2 On this basis, the Court held that a pre-deposit in respect of this quantified amount ought to have been made at the time of filing the appeal, and expressed surprise that the appeal had initially been entertained without such pre-deposit.
2.3 The Court, however, held that, even if the pre-deposit had not been made, the appeal could not have been rejected outright without first giving the appellant an opportunity to make the requisite pre-deposit.
2.4 Upon counsel for the petitioner expressing willingness to make the necessary pre-deposit, the Court directed that the requisite pre-deposit be paid within a stipulated time and that, upon proof of such payment, the Appellate Authority must re-hear the appeal on merits.
2.5 The Court further directed that the petitioner be afforded a personal hearing, with due notice to be issued at the specified email address and mobile number.
Conclusions
2.6 Quantified disallowance and proposed recovery of ITC in the show cause notice attract the requirement of pre-deposit at the appellate stage.
2.7 An appeal cannot be rejected merely for non-payment of pre-deposit without first granting the appellant an opportunity to make such pre-deposit.
2.8 The impugned appellate order rejecting the appeal for non-payment of pre-deposit was set aside, the petitioner was permitted to make the requisite pre-deposit within the prescribed time, and the Appellate Authority was directed to re-hear and decide the appeal on merits after granting a personal hearing.
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