2022 (5) TMI 1236 - HC - GST

Maintainability of appeal - condonation of delay in filing appeal - requirement of mandatory pre-deposit - HELD THAT - Since this Court had directed the Appellate Authority to exclude the period spent by the petitioner in pursuing the litigation in W.P.(C) No.2963 of 2018, and the said judgment became final, the Appellate Authority was bound to abide by it. Failure to abide by the binding directions in the said judgment has rendered the impuned order perverse. Requirement of mandatory pre-deposit - HELD THAT - As rightly pointed out by the learned counsel for the petitioner, since the bank guarantee furnished by the petitioner is alleged to have been invoked, the said matter ought to have been considered by the Appellate Authority. Once the entire tax and penalty imposed on the petitioner and secured by the Bank Guarantee was fully satisfied by invoking the guarantee, there cannot be any insistence of a further payment contemplated under section 107(6)(b). This aspect was not considered in Ext.P5. Failure to consider the alleged encashment of bank guarantee has also rendered the impugned order perverse. Petition allowed.

Summary

Issues:
1. Applicability of the appellate mechanism under the Goods and Services Tax Act, 2017.
2. Compliance with statutory remedies for appeal.
3. Validity of the order rejecting the appeal based on defects noticed.
4. Consideration of limitation period, pre-deposit requirement, and court fee payment towards the Kerala Legal Benefit Fund.

Analysis:
1. The petitioner, being an assessee under the Goods and Services Tax Act, 2017, approached the High Court under Article 226 of the Constitution of India due to the non-functionality of the appellate mechanism under the Act. The Court disposed of the petition, directing the Appellate Authority to exclude the time spent by the petitioner in the writ petition while revoking the limitation.

2. Subsequently, the petitioner offered an appeal before the Appellate Authority, which issued a notice of defect citing three issues: limitation, failure to remove pre-deposit, and non-payment of court fee towards the Kerala Legal Benefit Fund. The Appellate Authority dismissed the appeal based on these defects, leading the petitioner to challenge the order as defective.

3. The learned counsel for the petitioner argued that the impugned order was erroneous and perverse. It was contended that the Appellate Authority failed to consider the binding direction of the Court to exclude the time spent by the petitioner in the writ petition while revoking the limitation. Additionally, it was argued that the pre-deposit requirement did not apply as the bank guarantee furnished by the petitioner had already covered the amounts due, and the confusion regarding the court fee payment towards the Kerala Legal Benefit Fund was resolved by the petitioner's willingness to pay.

4. Upon hearing the arguments, the Court found that the impugned order was liable to be set aside for a reconsideration of the matter. The Court reiterated its previous direction to exclude the time spent by the petitioner in the writ petition for revoking the limitation. It emphasized that the Appellate Authority should have considered the encashment of the bank guarantee and the petitioner's offer to pay the court fee towards the Kerala Legal Benefit Fund. Consequently, the Court set aside the impugned order and directed the respondents to reconsider the appeal, provided the petitioner deposits the court fee within 30 days.