2022 (8) TMI 591 - HC - GST

Appeal filed by the Petitioner - Refusal to accept additional evidences produced - whether the request of the Petitioner seeking a direction to the Appellate Authority to accept the endorsement certificate filed pending appeal can be accepted? - HELD THAT - The fact that, the Petitioner has not filed the endorsement certificate along with the refund application is not in dispute. It is also not in dispute that, against the Order of refusing to grant refund, the Petitioner has preferred an appeal before the Respondent No. 1. It is also not in dispute that the Petitioner has not filed endorsement certificate issued by the specified officer of the SEZ Unit along with the appeal also. Pending appeal, the Petitioner herein is said to have filed an application requesting the Appellate Authority to accept the endorsement certificate issued by the specified officer in respect of its recipient SEZ Units. Insofar as the plea of the Respondents that the Petitioner ought to have obtained endorsement certificate much prior to arrival of Covid in India, it is to be noted here that the Petitioner herein has two years time to claim refund and the Petitioner could not have anticipated that the pandemic will sweep the entire country during that period. Therefore, non obtaining endorsement certificate prior to Covid pandemic cannot be a ground to reject the claim. As stated earlier, the Petitioner could not have anticipated the situation and when it thought of making an application within the time prescribed, the entire country was engulfed with pandemic. Rule 112(4) of C.G.S.T. Rules postulate that, nothing contained in the said Rule shall affect the power of the Appellate Authority or the Appellate Tribunal to direct production of any document, or examination of any witness, to enable it to dispose of the appeal. In fact, Section 107(11) of C.G.S.T. Act contemplate that, before disposing of any appeal, the Appellate Authority may make any further inquiry as he thinks fit - However, additional evidence at the appellate stage cane be entertained, at the discretion of the appellate authority, in cases where it can be proved that the party did not get the opportunity to file the documents at the lower stage or the original authority refused to admit the evidence or the appellant establishes that it had exercised due diligence, but was still unable to produce such evidence during the original proceedings. Therefore, the circumstances on which the discretion can be exercised for entertaining additional evidence at the belated stage squarely fits in the instant case, more so in view of the findings of the Appellate Authority. The request of the Petitioner to accept the endorsement certificate, dated 11.01.2021, of the specified officer of Ramky Pharmacity India Limited, is allowed - Petition allowed.

Summary

Issues Involved:
1. Validity of rejecting the appeal without considering endorsement certificates.
2. Compliance with statutory requirements for refund claims.
3. Acceptance of additional evidence (endorsement certificates) pending appeal.
4. Alleged violation of principles of natural justice and Article 14 of the Constitution of India.

Issue-Wise Detailed Analysis:

1. Validity of Rejecting the Appeal Without Considering Endorsement Certificates:
The Petitioner challenged the Order in Appeal No. VIZ-GST-000-APP-021-21-22, dated 30.07.2021, which rejected the appeal without considering the endorsement certificates filed by the Petitioner. The Petitioner argued that the rejection was illegal, improper, incorrect, and violative of Article 14 and 19(1)(g) of the Constitution of India. The Petitioner contended that due to the Covid pandemic, obtaining the endorsement certificates was delayed, and the authorities should have considered this difficulty.

2. Compliance with Statutory Requirements for Refund Claims:
The Petitioner, registered under the C.G.S.T. Act and A.P.G.S.T. Act, provided Express Courier Services to SEZ Units, which are zero-rated supplies. The Petitioner filed refund claims for the period April 2018 to March 2019 under Section 54 of the C.G.S.T. Act read with Rule 89 of the C.G.S.T. Rules. The Petitioner filed the refund claims within the extended time limit due to the Covid pandemic but without the endorsement certificates. The authorities issued a show cause notice for non-submission of the endorsement certificates and subsequently rejected the refund claims.

3. Acceptance of Additional Evidence (Endorsement Certificates) Pending Appeal:
The Petitioner obtained the endorsement certificates after filing the appeal and submitted them as additional material. The Appellate Authority rejected the appeal, stating that the endorsement certificates were not submitted within the specified time. The Petitioner argued that Rule 112 of the C.G.S.T. Rules allows for the acceptance of additional evidence if the appellant was prevented by sufficient cause from producing it earlier. The Court noted that the Petitioner had been diligently pursuing the endorsement certificates and that the Appellate Authority has the discretion to accept additional evidence in such circumstances.

4. Alleged Violation of Principles of Natural Justice and Article 14 of the Constitution of India:
The Petitioner argued that the rejection of the refund claims without considering the endorsement certificates violated the principles of natural justice and Article 14 of the Constitution. The Petitioner contended that the authorities did not provide an opportunity to explain the reasons for the delay in obtaining the endorsement certificates. The Court agreed that the Petitioner should have been given an opportunity to explain and that the rejection of the claims without considering the additional evidence was unjust.

Conclusion:
The Court allowed the Petitioner's request to accept the endorsement certificates and set aside the impugned Order dated 30.07.2021. The matters were remanded back to the Appellate Authority to reconsider the refund claims after accepting the additional evidence. The Court emphasized that the Appellate Authority has the discretion to accept additional evidence when sufficient cause is shown. The Writ Petitions were allowed, and the Appellate Authority was directed to deal with the matters afresh in accordance with the law. No order as to costs was made, and any pending interlocutory applications were closed.