2024 (10) TMI 1027 - HC - GST

Challenge to order passed under section 73 of the WBGST Act/CGST Act, 2017 - Single Bench was of the view that the appellants should exhaust the appellate remedy available under section 107 of the Act - HELD THAT - Hon ble Supreme Court in M/s. Radhasoami Satsang, Saomi Bagh, Agra v. Commissioner of Income Tax 1991 (11) TMI 2 - SUPREME COURT held that res judicata does not apply to income tax proceedings as each assessment year being a unit, what is decided is one year may not apply in the following year but where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year - The facts of the present case clearly show that in respect of earlier assessment year i.e. 2017-2018, on identical set of facts, it is seen that the department has dropped the demand and the proceedings have attained the finality. Therefore, in order to maintain a consistent approach in the matter, this Court is of the view that one more opportunity can be granted to the appellants to go before the authority and establish their case that it is similar to that of the case for the assessment year 2017-2018 among other grounds that they may be entitled to canvass. The order passed in the writ petition is set aside. Consequently, the adjudication order passed under section 73 (9) of the Act dated April 8, 2024 is set aside and the matter is restored to the stage of show-cause notice dated December 5, 2023 - Appeal allowed.

Summary

Issues:
Challenge to order under WBGST Act/CGST Act, 2017 for tax period April 2018 to March 2019. Appellate remedy under section 107 of the Act. Ex-parte order due to non-appearance. Request for one more opportunity based on previous assessment year's decision. Application of res judicata principle. Setting aside the order and restoration to show-cause notice stage.

Analysis:
The High Court of Calcutta heard an intra-Court appeal against an order dated August 28, 2024, pertaining to a challenge under the WBGST Act/CGST Act, 2017 for the tax period April 2018 to March 2019. The appellants had not availed the appellate remedy under section 107 of the Act, leading to the unsuccessful writ petition. The Single Bench directed the appellants to exhaust the appellate remedy, prompting the appeal before the Court.

Upon reviewing the case, the Court noted that the appellants failed to respond to the show-cause notice or attend the personal hearing, resulting in the proceeding being completed on a best judgment basis. The appellants argued for another opportunity citing similar facts in a previous assessment year where proceedings were dropped by the authority. They relied on the principle of res judicata, emphasizing a consistent approach by the department based on previous decisions.

Citing the Supreme Court's decision in M/s. Radhasoami Satsang case, the Court acknowledged the importance of maintaining consistency in decisions across assessment years if the facts remain unchanged and previous decisions are unchallenged. Consequently, the Court allowed the appeal, setting aside the previous order and restoring the matter to the show-cause notice stage for the appellants to present their case.

The appellants were directed to submit their reply within 15 days, followed by a personal hearing without seeking adjournment. The adjudicating authority was instructed to pass fresh orders within four weeks of the conclusion of the personal hearing. No costs were awarded, and the Court emphasized the prompt issuance of a certified copy of the order upon compliance with legal formalities. The judgment was delivered by Hon'ble Chief Justice T.S. Sivagnanam and Hon'ble Mr. Justice Hiranmay Bhattacharyya.