2025 (12) TMI 1730 - HC - GST

GST demand order appeal deadline missed u/s107; writ allowed and case remitted after 25% cash pre-deposit.

Where the statutory period to file an appeal under s.107 of the GST Acts, 2017 against the impugned demand order had expired and the assessee instead ... Confirmation of GST demand despite expiry of the limitation period u/s 107 of GST Act - HELD THAT:- It is noticed that the limitation for filing an appeal under Section 107 of the respective GST enactments, 2017 against the impugned Order has already expired. The present Writ Petition has been filed only on 11.06.2025. Under similar circumstances, Orders have been quashed and cases have been remitted back to pass a fresh order on terms subject to such Assessee depositing 25% to 100% of the disputed tax depending upon the length of delay in approaching the Court - there are no reason to take a different view in this case - Therefore, to balance the interest of both parties viz., the Assessee and the Revenue, the case is remitted back to the Respondent to pass a fresh order on merits subject to the Petitioner depositing 25% of the disputed tax in cash from the Petitioner's Electronic Cash Register within a period of thirty days from the date of receipt of a copy of this order. Petition disposed off. 1. ISSUES PRESENTED AND CONSIDERED (i) Whether the confirmed GST demand order should be interfered with in writ jurisdiction despite expiry of the statutory appeal limitation, and if so, on what equitable conditions to balance the interests of the assessee and the Revenue. (ii) What consequential directions should govern remand, including pre-deposit, opportunity to reply, timeline for fresh adjudication, and the conditions for lifting bank account attachment. 2. ISSUE-WISE DETAILED ANALYSIS Issue (i): Interference after expiry of appeal limitation; conditional remand Legal framework (as discussed): The Court noted that the limitation for filing an appeal under Section 107 of the GST enactments had expired by the time the writ petition was filed. Interpretation and reasoning: The Court took note that, in similar circumstances, demands have been quashed and matters remitted for fresh decision subject to deposit of a percentage of the disputed tax, calibrated to the delay in approaching the Court. Finding no reason to depart from that approach, the Court held that a remand with a partial pre-deposit would appropriately balance the competing interests of the assessee and the Revenue. Conclusions: The impugned demand order was not allowed to stand as a final determination; instead, the matter was remitted to the respondent for a fresh order on merits, subject to the petitioner depositing 25% of the disputed tax in cash from the electronic cash register within 30 days of receipt of the Court's order. Issue (ii): Directions on remand, reply to show cause notice, adjudication timeline, and bank attachment Legal framework (as discussed): The Court structured the remand in terms of procedural fairness (reply and documents), adjudication on merits, and conditional relief concerning bank attachment, while keeping recovery rights intact upon non-compliance. Interpretation and reasoning: To ensure effective adjudication, the Court required the petitioner to submit a reply with supporting documents to the show cause notice and directed that the impugned order be treated as an addendum to the show cause notice, thereby integrating the impugned confirmation into the remanded adjudicatory process. To avoid undue hardship during remand, the Court provided for automatic vacation of bank attachment, but only upon compliance with the pre-deposit condition and subject to absence of other arrears. To safeguard the Revenue, the Court authorized recovery proceedings if the petitioner failed to comply, treating the situation as if the writ had been dismissed in limine, while still requiring due notice before any adverse order. Conclusions: (a) The petitioner must file a reply to the show cause notice dated 04.09.2024 with documents within the stipulated period, treating the impugned order as an addendum to that notice. (b) Upon compliance, the respondent must pass a final order on merits in accordance with law, preferably within three months of such reply/pre-deposit. (c) Bank account attachment stands automatically vacated upon deposit of 25% of the disputed tax and only if the petitioner is not in arrears of any other amount apart from the impugned demand. (d) On non-compliance with any stipulation, the respondent may proceed to recover tax in accordance with law as if the writ were dismissed in limine, after giving due notice.