2024 (2) TMI 135 - HC - GST

Maintainability of petition - availability of statutory appeal - Tribunal has not yet been constituted - appealable under Section 112 of CGST Act - HELD THAT - In any case, in face of complete failure on part of appeal authority to exercise its jurisdiction in accordance with law, the writ court may not hold itself to offer the necessary corrections required, at this initial stage itself. Undeniably, the appeal authority may either confirm or modify or annul the order under appeal. In face of statutory prescription allowing for only three above described options to the appeal authority, no inherent power may remain be exercised by the appeal authority to set aside the order under appeal and remand the proceedings to the original authority. Any doubt in that regard has been clarified by the legislature itself by stating that the appeal authority shall not refer the matter back to the adjudicating authority. Once the appeal authority is seen to have failed to exercise its jurisdiction in accordance with law, such an order may never be sustained. It is accordingly set aside and the matter is remanded to the appeal authority to pass a fresh order after hearing the parties afresh. Petition allowed by way of remand.

Summary

Issues Involved:
The judgment involves the challenge to an order passed by the Joint Director (CGST) (Appeals) and the maintainability of the writ petition.

Challenge to Order by Joint Director (CGST) (Appeals):
The petitioner filed a petition to challenge the order passed by the Joint Director (CGST) (Appeals) remanding the matter back to the original adjudicating authority for de novo adjudication. The petitioner contended that the order was passed in defiance of the provisions of Section 107(11) of the CGST Act, 2017, which outlines the powers of the Appellate Authority. The petitioner argued that the appeal authority cannot refer the case back to the adjudicating authority, as clarified by the legislature. The court found that the appeal authority had failed to exercise its jurisdiction in accordance with the law, and hence, set aside the order and remanded the matter back to the appeal authority for a fresh order after hearing the parties afresh.

Maintainability of Writ Petition:
The counsel for the Revenue raised a preliminary objection regarding the maintainability of the writ petition, stating that the impugned order is appealable under Section 112 of the Act. However, the court found that the Tribunal had not yet been constituted, and in the absence of the appeal authority exercising its jurisdiction in accordance with the law, the writ court could intervene. The court held that since the appeal authority can only confirm, modify, or annul the order under appeal, it cannot refer the matter back to the adjudicating authority. Therefore, the court allowed the writ petition and remanded the matter back to the appeal authority for fresh consideration.