2024 (7) TMI 737 - HC - GST

Challenge to order passed by the appellate authority under Section 107 of the CGST Act, 2017/WBGST Act, 2017 - HELD THAT - Paragraph 3 of the N/N. 53/2023 dated 2nd November, 2023, inter alia, provides that no appeal shall be filed under this notification, unless the appellant has paid in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him and a sum equal to twelve and a half per cent of the remaining amount of tax in dispute arising from the said order subject to maximum of twenty-five crores rupees, in relation to which the appeal has been filed, out of which at least twenty per cent should have been paid by debiting from the Electronic Cash Ledger. There are other conditions in the said notification which are not relevant for the present purpose. The payment made in Form GST DRC-03 dated 30th January, 2024, would undisputedly demonstrate that the same was not made against any show cause notice or against any particular order but was made in connection with the appeal and in terms of the aforesaid notification. In fact, one of the conditions of the aforesaid notification for availing the benefit has been recorded in the remarks column of the aforesaid Form GST DRC-03. The respondents have also not been able to identify any particular Form under which the pre-deposit for maintaining any appeal in terms of the aforesaid notification is required to be made. The order dated 16th February, 2024 passed by the appellate authority under Section 107 of the said Act is set aside - matter is remanded back to the appellate authority with a direction upon the appellate authority to treat the aforesaid deposit made by the petitioner in From GST DRC-03 dated 30th January, 2024, as a deposit within the meaning of the aforesaid notification dated 2nd November, 2023 with a further direction upon the appellate authority to hear out and dispose of the appeal within a period of 8 weeks from the date of communication of this order by giving an opportunity of personal hearing to the petitioner. Petition disposed off by way of remand.

Summary

Issues:
Challenge to order under Section 107 of the Central Goods and Services Tax Act, 2017/West Bengal Goods and Services Tax Act, 2017 based on notification dated 2nd November, 2023.

Analysis:
The petitioner filed a writ petition challenging an order passed by the appellate authority under Section 107 of the GST Act. The petitioner had initially filed an appeal against an order dated 25th March, 2023, for the tax period July 2017 to March 2018. The appeal was accompanied by the required pre-deposit amount as per Section 107(6) of the Act. Subsequently, the petitioner learned about a notification dated 2nd November, 2023, allowing appeals to be regularized if filed beyond the limitation period by paying 12.5% of the tax amount in dispute. The petitioner then deposited the balance amount within the validity period of the notification. However, the appellate authority rejected the appeal, stating the payment was against voluntary liabilities, not in accordance with the notification.

The petitioner argued that the appellate authority's decision was unfounded, requesting the court to set it aside and direct acceptance of the appeal. The respondents contended that the appeal was rejected as the petitioner did not comply with the terms of the notification by not paying an additional 2.5% of the tax in dispute. They highlighted that all voluntary tax payments are usually made through Form GST DRC-03, indicating the payment was for voluntary liabilities. The court considered the arguments and materials on record.

The court observed that the petitioner's deposit made in Form GST DRC-03 was in connection with the appeal and in line with the notification's conditions. It noted that the payment was not against any specific order but related to the appeal, contrary to the appellate authority's view. As a result, the court found the appellate authority's conclusion baseless and overturned the order, remanding the matter back to the authority to treat the deposit as per the notification and dispose of the appeal within 8 weeks, allowing a personal hearing for the petitioner. The court clarified that it had not delved into the case's merits, leaving the authority free to decide without influence from its observations. The writ petition was disposed of without costs, with an option for parties to obtain a certified copy of the order upon request.