2024 (8) TMI 297 - HC - GST

Challenge to adjudication order passed under Section 73 (9) of the West Bengal GST/CGST Act, 2017 - proper officer failed to call for the records prior to passing the adjudication order - violation of principles of natural justice - statutory pre-deposit not made, for maintaining appeal - HELD THAT - Admittedly in this case, it is noticed that the subject matter of challenge in the writ petition is an adjudication order passed by the proper officer under Section 73 (9) of the said Act in respect of the tax period April 2018 to March 2019. A consequential demand along with the summary of the order has also been issued. Although Revenue has submitted that there is no irregularity in the order impugned as there has been no disclosure by the petitioner no. 1, however, since, there is a statutory remedy in the form of an appeal, without going into the issue as to whether the explanation offered by the petitioner no. 1 to the show-cause notice is a proper explanation, the petitioner no. 1 should be permitted to approach the Appellate Authority. Further since, the statutory remedy requires a pre-deposit to be made for maintaining the appeal, petitioner no. 1 cannot, in the given facts, be permitted to maintain an appeal without making such statutory pre-deposit. The writ petition stands disposed of.

Summary

Issues:
Challenging adjudication order under Section 73 (9) of the West Bengal GST/CGST Act, 2017 dated 29th January, 2024.

Analysis:
The writ petition was filed to challenge the adjudication order passed under Section 73 (9) of the West Bengal GST/CGST Act, 2017. The petitioner was served a show-cause notice highlighting discrepancies regarding Input Tax Credit (ITC) availed in excess and the proposal for reverse of ITC. The petitioner claimed that it is only responsible for maintaining records and returns, not liable if the supplier fails to meet obligations. The petitioner cited a judgment in support. The proper officer passed the adjudication order after a personal hearing, covering the tax period April 2018 to March 2019. The petitioners contended that no records were called for before passing the order, and it was mechanical. They argued against the efficacy of the appeal due to the need to deposit 10% of the disputed tax amount, especially considering their financial position and the absence of current business operations.

The respondents argued that the petitioner has an efficacious remedy in the form of a statutory appeal. They criticized the vagueness of the petitioner's response to the show-cause notice, lacking in particulars. The proper officer had provided an opportunity for a hearing before passing the order. The court noted that the challenge was to an adjudication order for the tax period April 2018 to March 2019. While the respondents claimed no irregularity in the order due to lack of disclosure by the petitioner, the court emphasized the availability of a statutory appeal. It allowed the petitioner to approach the Appellate Authority without delving into the adequacy of the petitioner's explanation to the show-cause notice.

The petitioner's argument about financial constraints hindering the appeal's efficacy lacked substantiation on record. The court highlighted the necessity of a pre-deposit for the statutory remedy of appeal, indicating that the petitioner cannot maintain an appeal without fulfilling this requirement. Despite the writ petition being pending for some time and the appeal filing period expiring, the court directed the petitioner to file an appeal within fifteen days from the order date with the Appellate Authority. The Appellate Authority was instructed to hear the appeal on merits, subject to other formalities. The writ petition was disposed of with no costs imposed, and parties were directed to receive certified copies of the order upon compliance with formalities.