2022 (8) TMI 592 - HC - GST

Maintainability of petition - availability of alternative remedy - validity of penultimate portion of the order whereunder and by which the learned Writ Court was prima facie satisfied that the appellants / writ petitioners have been able to make out a case for an interim order - HELD THAT - The learned Writ Court was right in protecting the interest of the appellants till the disposal of the writ petitions as the appellants were able to make out a prima facie case to the satisfaction of the learned Single Bench pursuant to which the writ petitions have been entertained and affidavits-in-opposition have been directed to be filed by the respondents. The direction issued by the learned Writ Court by directing the deposit of 10% of the demand in question should be construed to be in compliance of Rule 51 of the aforementioned Rules.However, we have a small reservation as regards whether deposit of 10% of the entire demand has to be directed or only deposit of 10% of the tax in dispute has to be directed to be made. Rule 51 of the Rules gives power to the Court to grant stay of realisation of any amount assessed as tax subject to the condition that the aggrieved party gives security and such security must be in satisfaction of the Court that it will be adequate and protecting the interest of the revenue. Therefore, the learned Single Bench rightly exercised its discretion and bearing in mind the mandate in Rule 51 has issued a direction - the direction to deposit 10% of the entire demand would be onerous as had the appellants file appeals before the Joint Commissioner under Section 107 of the Act, the appellants were required to deposit only 10% of the tax in dispute. The appeals are partly allowed and the directions issued by the learned Single Bench directing deposit of 10% of the demand in question stands modified as deposit of 10% of the tax in dispute. The appellants are granted 30 days time from the date of receipt of the server copy of this order to make the deposit before the appropriate authority and if the same is complied with, no coercive action shall be taken against the appellants for recovery of the balance amount as demanded.

Summary

Issues:
1. Correcting the year of instituting appeals
2. Interim orders in writ petitions
3. Stay of impugned orders and deposit requirement
4. Jurisdictional matters and procedural grounds
5. Interpretation of Rule 51 of the Rules
6. Modification of the order regarding deposit amount

Issue 1: Correcting the year of instituting appeals
The judgment begins by correcting the year of instituting the appeals to 2022 instead of 2021.

Issue 2: Interim orders in writ petitions
The appeals were against interim orders passed by a Single Bench where it was observed that the writ petitions should not be dismissed at the motion stage based on the availability of alternative remedies. The appellants were directed to file their reply to the affidavit-in-opposition within a specified timeframe. The Single Bench was satisfied that the appellants had made out a case for an interim order, leading to a conditional stay of the impugned adjudication subject to a deposit requirement.

Issue 3: Stay of impugned orders and deposit requirement
The appellants contended that the Single Bench should have granted a stay on the impugned orders without requiring a deposit of 10% of the demand. They argued that even if an appeal was filed under Section 107 of the West Bengal Goods and Services Tax Act, only 10% of the tax needed to be deposited. The Government Advocate referred to Rule 51 of the Rules, stating that in revenue-related applications, a stay on realization requires security deemed adequate by the Court.

Issue 4: Jurisdictional matters and procedural grounds
The appellants raised various grounds in the writ petitions related to jurisdictional matters and procedural infractions, claiming the impugned orders were nullities. They also argued that the deposit requirement was excessive considering the grounds raised in the writ petitions.

Issue 5: Interpretation of Rule 51 of the Rules
The Court found that Rule 51 empowers the Court to grant a stay on the realization of tax amounts, subject to providing adequate security to protect the revenue's interests. The Single Bench exercised discretion in issuing the deposit direction in compliance with Rule 51.

Issue 6: Modification of the order regarding deposit amount
The Court acknowledged that the direction to deposit 10% of the entire demand was burdensome, as appeals under Section 107 required only 10% of the tax in dispute to be deposited. Consequently, the Court partly allowed the appeals, modifying the deposit requirement to 10% of the tax in dispute and granting the appellants 30 days to comply. The respondents were directed to file their affidavits-in-opposition within a specified timeframe, and all connected applications were deemed disposed of accordingly, with no costs awarded.