2023 (1) TMI 333 - HC - GST

Input Tax Credit - the non-payment of the GST amount charged by the supplier - appellants filed the writ petition contending that the non-payment of the GST amount charged by the 4th respondent to the appellants is violative of Article 19(1)(g) and 300A of the Constitution of India and against the provisions of the CGST and WBGST Act, 2017 - HELD THAT - Undoubtedly, the appellants are aggrieved persons against the advance ruling. The 4th respondent having not preferred an appeal, such conduct of the 4th respondent cannot prejudice the rights of the appellants. Admittedly, the invoices, which were subject matter of consideration by the authority were the invoices raised by the appellants. Therefore, the appellants should have been put on notice by the authority or in other words, the 4th respondent ought to have impleaded the appellants in the proceedings before the authority. The appellants cannot be nonsuited by virtue of an order, which was passed by the authority without hearing them. Therefore, we are of the view that the appellants should not be left remediless. Though it is submitted by the learned Government Advocate appearing for the State that appeal has been provided to the appellate authority and if the appellants qualify the definition of an aggrieved person, they could very well approach the appellate authority - since the appellants have contended that sufficient factual details were not placed before the authority, directing the appellants to prefer an appeal to the appellate authority may not be effective since the facts, which the appellants seek to bring on record were not part of the records before the original authority. The matter has to be re-examined by the authority themselves instead of directing the appellants to approach the appellate authority - the matter is remanded back to the 5th respondent for fresh consideration - Appeal allowed by way of remand.

Summary

Issues:
1. Appeal against the order of the learned Single Bench declining interim relief.
2. Validity of the order of the West Bengal Authority for Advance Ruling regarding input tax credit.
3. Applicability of CGST and WBGST Act, 2017.
4. Rights of the appellants in the advance ruling process.
5. Need for re-examination of the matter by the authority.

Analysis:
1. The appeal was filed against the order of the Single Bench declining interim relief. The appellants contended that non-payment of GST amount violated constitutional provisions and Acts. The order in question was passed by the West Bengal Authority for Advance Ruling, holding the 4th respondent not entitled to input tax credit claimed from the appellants' invoices. The appellants argued that they were not heard by the authority, and the facts presented were incomplete, necessitating their approach to the writ Court.

2. The Court analyzed the provisions of Chapter XVII of the CGST Act concerning advance rulings. It noted that the appellants being registered dealers could qualify as applicants under the Act. However, the applicant before the authority was the 4th respondent. The Court emphasized that the appellants, as aggrieved parties, should have been given notice and heard by the authority, especially since the invoices in question were raised by them. The failure of the 4th respondent to appeal the ruling could not prejudice the rights of the appellants.

3. The Court held that the appellants should not be left remediless due to the authority's decision without hearing them. It was deemed ineffective to direct the appellants to appeal to the appellate authority as the factual details they sought to present were not part of the original records. Consequently, the Court decided to remand the matter back to the authority for fresh consideration, directing them to issue notices, hear all parties, allow submissions, and pass fresh orders based on merits and law compliance.

4. The Court emphasized expeditious compliance with its directions, preferably within eight weeks, without delving into the merits of the case, leaving it to the authority to make a reasoned decision based on the facts presented. Finally, no costs were awarded, and the parties were to receive certified copies of the order promptly upon fulfilling legal formalities.