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2023 (8) TMI 576 - HC - GSTMaintainability of appeal - compliance with the pre-deposit - amount as deposited by the Petitioner anterior to the filing of the appeal under the provisions of Section 73(5) of the CGST Act - whether the said amount can be taken into consideration for the purpose of compliance of the requirement of pre-deposit under Section 107(6) of the CGST Act? HELD THAT - There cannot be two opinions, that any procedural rule or technical requirement cannot defeat the availability of a remedy of an appeal, made available to the assessee under a substantive statutory provision nor can such remedy be rendered illusory. The interpretation of the provisions need to be made to recognise the intention of the legislature, which is to aid access to justice, which itself is a fundamental right guaranteed under the Constitution. When it comes to right of an appeal, as guaranteed by a statutory provision, such right needs to be made effective and meaningful. It cannot be frustrated by shackles of complex procedural formalities. When it comes to the compliance of sub-section (6) of Section 107 of the CGST Act, namely, the mandatory payment of the tax, being a condition precedent, mandated in terms of the provisions of sub-sections (6)(a) and (6)(b) of Section 107 of the CGST Act, in our opinion the principle as laid down in Supreme Court in VVF (INDIA) LIMITED VERSUS THE STATE OF MAHARASHTRA ORS. 2021 (12) TMI 477 - SUPREME COURT would become applicable considering that the provisions of the CGST Act on pre-deposit are not too different from the provisions of the MVAT Act, which fell for consideration of the Supreme Court. In VVF India Ltd., the Supreme Court was considering the correctness of the view of the High Court on the interpretation of Section 26(6A) of the MVAT Act. Sub-section (6A) of Section 26 of the MVAT Act is a provision almost in similar terms to sub-section (6) of Section 107 of the CGST Act. Such provision inter alia provided that no appeal against an order passed on or after the commencement of the Maharashtra Tax Laws (Levy Amendment and Validation) Act, 2017 shall be filed before the appellate authority, unless it is accompanied by the proof of payment of an aggregate of the amounts as applicable and as set out in clauses (a) and(d) of sub-section (6A) of Section 26 of the MVAT Act. Clause (a) of sub-section (6A) of Section 26 of the MVAT Act provided that in case of an appeal against an order, which involved dis-allowance of a claim, an amount equal to 10 per cent of an amount of tax disputed by the appellant would be required to be made. Thus, the provision, which fell for consideration of the Supreme Court, was materially different from the provisions under the CGST Act with which the present proceedings are concerned. The Supreme Court, referring to the decision of the Supreme Court in AV FERNANDEZ VERSUS THE STATE OF KERALA 1957 (4) TMI 46 - SUPREME COURT held that the approach of the High Court was not correct. While allowing the appeal and permitting such benefit of the amount, which was paid under protest for the purposes of the fulfillment of sub-section (6A) of Section 26 of the MVAT Act, the Supreme Court observed T he non-obstante provision contained in section 26 of the Act has the effect of taking these transactions out of the purview of the Act with the result that the dealer is not required nor is he entitled to include them in the calculations of his turnover liable to tax thereunder. Thus, the voluntary deposit as made under protest by the Petitioner under the provisions of sub-section (5) of Section 73 of the CGST Act, cannot be excluded from consideration for the purpose of compliance as mandated by sub-section (6) of Section 107 of the CGST Act. The Petitioner is permitted to file an appeal under Section 107 of the CGST Act either by the electronic mode or by manual filing within a period of two weeks from the day a copy of this order is made available - Appellate Authority is directed to register compliance of the provisions of sub-section (6) of Section 107 of the CGST Act by taking into consideration the voluntary deposit made by the Petitioner under sub-section (5) of Section 73 of the CGST Act - petition allowed.
Issues Involved:
1. Functionality of the GSTN Portal preventing the filing of a statutory appeal. 2. Whether the voluntary deposit under Section 73(5) of the CGST Act can be considered for pre-deposit under Section 107(6) of the CGST Act. Summary: Issue 1: Functionality of the GSTN Portal The Petitioner approached the court under Article 226 of the Constitution of India, contending that the GSTN Portal's malfunction prevented the lodging/filing of a statutory appeal under Section 107 of the CGST Act. The Petitioner intended to take the benefit of the voluntary deposit made under Section 73(5) of the CGST Act for compliance with Section 107(6), which mandates a pre-deposit of tax, interest, fine, fee, and penalty before filing an appeal. Issue 2: Consideration of Voluntary Deposit for Pre-Deposit The Petitioner argued that the voluntary deposit under Section 73(5) should be accepted towards the pre-deposit requirement under Section 107(6). The Petitioner cited the Supreme Court's decision in VVF (India) Ltd. vs. State of Maharashtra, which recognized that an anterior deposit could be considered for pre-deposit requirements. The Revenue opposed this, arguing that Sections 73(5) and 107(6) operate distinctly and that voluntary deposits should not be adjusted for pre-deposit requirements. The Union of India supported this view, emphasizing the uniform application of the electronic portal. Court's Analysis and Decision: The court found merit in the Petitioner's arguments, stating that procedural rules should not defeat the substantive right of appeal. The court noted that the voluntary deposit under Section 73(5) is not in pursuance of any demand or assessment order and should be considered for compliance with Section 107(6). The court referred to the Supreme Court's decision in VVF (India) Ltd., which allowed the consideration of an anterior deposit for pre-deposit requirements under similar provisions of the MVAT Act. Order: 1. The Petitioner is permitted to file an appeal under Section 107 of the CGST Act either electronically or manually within two weeks. 2. The Appellate Authority is directed to register the appeal by considering the voluntary deposit under Section 73(5) for compliance with Section 107(6). 3. The appeal should be registered either electronically or manually as deemed appropriate by the Appellate Authority. 4. The appeal should be adjudicated on merits without any objection as to the limitation, considering the Petitioner was bonafide pursuing the present proceedings. All petitions were disposed of with no costs.
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