2024 (2) TMI 172 - HC - GST

Refund of excess amount recovered by way of debiting the bank account of the petitioners - whether the petitioners would be liable to pay interest as demanded by the authorities vide the rectified order of demand? - HELD THAT - Since it does not appear from the record that any decision has been communicated to the petitioners on their prayer for installment, this court is of the considered view that the appellate authority should be directed to consider as to whether the petitioners were entitled to ITC reversal by installments and decide the same by passing a reasoned order and thereafter decide as to whether the rectified demand dated 6th July, 2022 can be sustained by assigning reasons. This court is of the considered view that the appellate authority should be directed to decide the appeal on merits - the order of the appellate authority dated 21st June, 2023 is set aside - Petition disposed off.

Summary

Issues Involved:
The petitioners challenged an order of the Senior Joint Commissioner of Revenue, Commercial Taxes, Siliguri Circle, regarding a demand notice for interest and excess amount recovery. The issues involved include the petitioners' eligibility for installment facility under the GST Act, delay in decision-making by the authorities, liability to pay interest, and violation of principles of natural justice.

Eligibility for Installment Facility:
The petitioners, a Real Estate Company, opted for a new taxation structure under the GST Act and applied for ITC reversal in installments. Despite submitting the necessary documentation manually due to unavailability on the common portal, no final decision was communicated by the authorities. The petitioners claimed entitlement to 24 installments as per a notification, but the court found that the discretion to allow or reject installments lies with the Commissioner.

Delay and Prejudice:
The delay in decision-making by the authorities regarding the petitioners' installment facility request resulted in an escalation of interest, causing prejudice to the petitioners. The court noted that non-communication of the decision on the installment facility amounted to a violation of natural justice principles.

Liability to Pay Interest:
The court emphasized that the decision on whether the petitioners would be liable to pay the demanded interest depended on the decision regarding the installment facility. No final decision had been communicated to the petitioners, leading the court to direct the appellate authority to consider the petitioners' entitlement to ITC reversal by installments and decide the appeal on its merits.

Court's Decision:
The High Court set aside the order of the appellate authority dated June 21, 2023, directing the authority to hear the appeal on merits. The appellate authority was instructed to decide on the petitioners' entitlement to installment facility and the validity of the rectified demand, ensuring a reasoned order. The court stressed the importance of expeditious disposal of the appeal within one month without unnecessary adjournments.

Conclusion:
The court disposed of the writ petition without costs, emphasizing that the respondents' allegations were not deemed admitted. The order highlighted the need for a prompt resolution of the appeal and granted certified copies to the parties' advocates upon request.