2025 (4) TMI 1229 - HC - GST

Maintainability of petition - availability of alternative remedy of appeal - Principles of natural justice - permissibility of cross-examination of a witness - ineligible availment f ITC based on fake documents - HELD THAT - It is found from the memorandum of appeal filed by the Joint Commissioner of Central Tax Howrah CGST CX Commissionerate that the stand taken by the department is that the learned writ court ought to have held that the statement of Niraj Kumar Nathani is nothing but a corroborative one apart from other evidences including the said investigation and inspection report issued by the Bureau of Investigation Government of West Bengal Commercial Taxes as well as from the other documentary evidence relied upon by the adjudicating authority in the order-in-original dated 30.10.2024 - the said statement need not be referred to in the event the assessee files a statutory appeal before the appellate authority. Conclusion - Necessarily the assessee has to be relegated to file an appeal before the appellate authority namely the Commissioner (Appeal) CGST Central Excise Appeal-II Commissionerate Kolkata. In the light of the fact that the time for preferring the appeal has already expired the assessee is directed to file the appeal within 45 days from the date of receipt of server copy of this order and the assessee shall comply with the pre-deposit condition. The assessee shall be permitted to file the appeal manually as the online filing may not be possible as appeal is belated - matter disposed off.

Summary

The Calcutta High Court, in appeals arising under the CGST Act, 2017, addressed the permissibility of cross-examination of a witness, Niraj Kumar Nathani. The department contended that Nathani's statement was merely corroborative and that other abandoned materials, including statements from company directors and investigation reports, established that the Input Tax Credit (ITC) availed was ineligible and based on fake documents. The Court observed that the writ court should not have permitted cross-examination on this statement, especially given the availability of other evidence.Significantly, the Court held that "the said statement need not be referred to in the event the assessee files a statutory appeal before the appellate authority." It emphasized that factual disputes are inappropriate for adjudication in writ proceedings and that the assessee must file an appeal before the Commissioner (Appeal) CGST & Central Excise Appeal-II Commissionerate, Kolkata, under Section 107(1) of the CGST Act, 2017.The Court set aside the impugned order and directed that the appellate authority decide the appeal "without reference to the statement recorded of Niraj Kumar Nathani," while adjudicating all other issues on merits and in accordance with law after affording personal hearing. Given the delay, the assessee was granted 45 days to file the appeal with compliance to pre-deposit conditions and permitted manual filing due to belatedness.All issues were left open for adjudication by the appellate authority. The observations made by the Single Bench in the impugned order were also set aside, and both matters were disposed of accordingly.