2024 (12) TMI 1401 - HC - GST

Recovery of excess ITC - Seeking issuance of a writ in the nature of mandamus directing waiver from payment of the mandatory statutory pre-deposit of 10% of the disputed tax amount under Section 107 of the Central Goods Services Tax Act, 2017 in order to enable the Petitioner to file an appeal - HELD THAT - This Court has not examined the legislative scheme. However, at this stage, the Petitioner now prays that he may be given four weeks additional time to file the appeal. Considering the fact that the issue as to whether any exemption, waiver or any reduction can be granted qua GST demands or not is yet to be adjudicated by this Court, it is deemed appropriate to permit the Petitioner, as a unique case, to file the appeal challenging both impugned orders, within a period of four weeks from today. Petition disposed off.

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

Whether the Petitioner is entitled to a waiver or reduction of the mandatory statutory pre-deposit of 10% of the disputed tax amount under Section 107 of the Central Goods & Services Tax Act, 2017 (CGST Act) to file an appeal.
Whether the Appellate Authority under the CGST Act has the discretion to waive or reduce the pre-deposit requirement.
Whether the Petitioner can be granted additional time to file an appeal against the impugned orders.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Waiver or Reduction of Pre-deposit

Relevant legal framework and precedents: The requirement for a pre-deposit under Section 107 of the CGST Act mandates a deposit of 10% of the disputed tax amount as a condition for filing an appeal.
Court's interpretation and reasoning: The Court noted that the CGST Act does not provide the Appellate Authority with discretion to waive or reduce the pre-deposit requirement, marking a conscious legislative choice.
Key evidence and findings: The Petitioner argued financial incapacity to meet the pre-deposit requirement, seeking relief from the Court.
Application of law to facts: The Court acknowledged the Petitioner's financial constraints but highlighted the absence of statutory discretion for waiver or reduction under the CGST Act.
Treatment of competing arguments: The Respondents argued against the waiver, emphasizing the legislative intent and the importance of the pre-deposit in the GST framework.
Conclusions: The Court did not grant a waiver or reduction but allowed the Petitioner additional time to file the appeal.

Issue 2: Discretion of the Appellate Authority

Relevant legal framework and precedents: The CGST Act's provisions do not explicitly grant discretion to the Appellate Authority concerning pre-deposit requirements.
Court's interpretation and reasoning: The Court did not delve into a detailed examination of the legislative scheme but recognized the lack of discretion as a legislative decision.
Key evidence and findings: The legislative framework was presented as lacking discretionary power for the Appellate Authority.
Application of law to facts: The Court adhered to the statutory framework, acknowledging the absence of discretion.
Treatment of competing arguments: The Respondents maintained that the statutory framework intentionally excludes discretion, a position the Court did not contest.
Conclusions: The Court did not alter the statutory framework, leaving the question of discretion unresolved for future adjudication.

Issue 3: Additional Time for Filing Appeal

Relevant legal framework and precedents: The Court has inherent powers to grant extensions for procedural compliance in specific circumstances.
Court's interpretation and reasoning: The Court deemed it appropriate to grant the Petitioner additional time to file the appeal, considering the unique circumstances presented.
Key evidence and findings: The Petitioner's request for additional time was based on the pending adjudication of the waiver issue.
Application of law to facts: The Court exercised its discretion to allow a four-week extension for filing the appeal.
Treatment of competing arguments: The Court balanced the procedural requirements with the Petitioner's situation, granting limited relief.
Conclusions: The Court permitted the Petitioner to file the appeal by 20th January 2025, without setting a precedent.

3. SIGNIFICANT HOLDINGS

Preserve verbatim quotes of crucial legal reasoning: "This order shall not act as a precedent. The questions of law which arise in this petition are left open."
Core principles established: The CGST Act's pre-deposit requirement is mandatory without discretionary waiver by the Appellate Authority; however, procedural flexibility may be exercised by the Court in unique cases.
Final determinations on each issue: No waiver or reduction of pre-deposit was granted; additional time was allowed for filing the appeal; the discretion of the Appellate Authority remains a question for future adjudication.

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