2022 (7) TMI 129 - HC - GST

Maintainability of appeal - appeal dismissed only the ground of non-payment of pre-deposit by the petitioner - HELD THAT - Perusal of the appellate order dated 06.08.2019 bearing memo no. 454 at Annexure-12 shows that the appeal was dismissed only on the ground of non-payment of deposit of 10% of the tax dues. We need not go into the merits of the case in the aforesaid facts and circumstances. However, we are inclined to allow the prayer of the petitioner for rehearing of the appeal subject to deposit of 10% of the tax dues. For that purpose, appellate order dated 06.08.2019 (Annexure-12) passed by the Joint Commissioner of State Tax (Appeal), Jamshedpur Division, Jamshedpur is set aside. The petitioner is directed to deposit the amount of Rs. 18,35,721.81/- or 10% of the total tax dues whichever is higher within a period of two weeks with the office of the Joint Commissioner of State Tax (Appeal), Jamshedpur Division, Jamshedpur in accordance with Section 107(6) of the Act. If the amount is deposited within the stipulated time, the appeal shall be restored to its original file and the Joint Commissioner of State Tax (Appeal), Jamshedpur Division, Jamshedpur shall proceed to hear the matter on its own merits. Petition disposed off.

Summary

Issues:
1. Quashing of appellate order based on non-payment of pre-deposit.
2. Blocking of electronic credit ledger leading to dismissal of appeal.
3. Interpretation of Section 107(6) of the CGST Act regarding pre-deposit requirements.
4. Request for rehearing of appeal on merits.

Analysis:
The petitioner sought to quash an appellate order that dismissed the appeal due to non-payment of the pre-deposit amount. The petitioner emphasized that the electronic credit ledger had been blocked, resulting in approximately Rs.1.83 Crore being with the State exchequer. The petitioner was willing to make the 10% pre-deposit and requested a rehearing on merits. Citing a Gujarat High Court judgment, the petitioner argued for a similar direction in their case.

The respondent State clarified that the petitioner misunderstood the availability of tax dues with the State exchequer for appeal purposes under Section 107(6) of the CGST Act. However, they did not oppose the petitioner's request to make the pre-deposit for rehearing the appeal.

The Court examined the facts and noted that the appeal was solely dismissed for non-payment of the 10% tax dues deposit. Without delving into the case's merits, the Court decided to allow the petitioner's plea for rehearing upon depositing the required amount. The appellate order was set aside, and the petitioner was directed to deposit Rs. 18,35,721.81 or 10% of the total tax dues, whichever was higher, within two weeks. Upon compliance, the appeal would be reinstated for a hearing on its merits by the Joint Commissioner of State Tax (Appeal).

In conclusion, the Court disposed of the writ petition, granting the petitioner the opportunity for a rehearing subject to fulfilling the pre-deposit condition as mandated by Section 107(6) of the Act.