M/S Shine Management Services vs. Joint Commissioner Of Commercial Taxes (Appeals)

Heard Shri B.G. Chidananda Urs, learned counsel appearing for the petitioners and Shri K. Hema Kumar, learned Additional Government Advocate appearing for the respondents.

The petitioner is registered under the provisions of the GST Act. What brings him to this court in the subject petition is the non entertainment of the appeal on the score under Section 107 of the CGST Act, 2017 on the score that he HC-KAR NC: 2025:KHC:34997 has failed to file an appeal, which in fact has resulted on the score that he is unable to make the deposit.

Facts in brief germane are as follows: The petitioner is said to be an undertaking, which serves manpower recruitment. The petitioner during the relevant point in time is said to have closed its business and assessment for the earlier years was pending before the respondent - authority. The adjudicating authority passes an order against the petitioner, which the petitioner wanted to challenge it in appeal. The impediment was, as the account of the petitioner was frozen till 28.05.2025, which was during the period within which the petitioner had to prefer an appeal before the Appellate Authority. Therefore, with the freezing of the account, which was the only account that was linked to the GST of the petitioner, the petitioner could not prefer an appeal, as he could not operate the bank account.

In that light, the petitioner has not preferred an appeal, the bank account gets defrozen at a later point in time, then the petitioner even if wanted to prefer an appeal, could not, as the limitation period for filing an appeal was over. HC-KAR NC: 2025:KHC:34997

In identical circumstances, the co-ordinate bench of this court in WP.No.4720/2024 connected with others disposed on 04.07.2025 has held as follows:

held as follows:

In pursuance of the order passed by this Court in the previous Wit Petition filed by the Petitioner, being Wit Petition (L) No. 28992 of 2023, the designated officer has adjudicated the show cause notice by an Order-in- Original dated 8th December, 2023 The Petitioner now assails such Order by filing Appeal under Section 107 of the Central Goods & Service Act. 2017. For filing of the Appeal, the Petitioner is in requirement to make pre- HC-KAR NC: 2025:KHC:34997 deposit of 10% of the disputed tax amount in such context, the prayers as made in the present Petition are that the Petitioner be permitted to withdraw and/or to operate the Petitioner's bank account, the details of which are set out in the petition so as to make pre- deposit of Rs.7,89,09,671/-, for filing of such Appeal

In our opinion, the prayers as made in the Petition are required to be permitted, as such amount is to be utilized by the Petitioner for making the pre-deposit, hence, it would not fall under the description of the amount being used for any private purpose, but to deposit the same, with the Government for maintaining the Appeal. We have taken a similar view in other proceedings.

In this view of the matter, we propose to dispose of this Petition by the following orders:-

All contentions of the parties on the merits of the Appeal are expressly kept open." HC-KAR NC: 2025:KHC:34997

INDIA & Ors., earlier to the afore-quoted judgment has again held as follows:

Hang regard to the respondent's allegations and findings grown in the Order-in-Original dated 25 Ma 2023 we are satisfied that this is not a case where the petitioner should be allowed to deal with any of the time, since the petitioner's Axis Bank Account No.918020073067221 at Bhayander Branch. At the same time, since the petitioner has a right to question the Order-in-Onginal dated 25 May 2023, it will not be proper if the petitioner is deprived of this valuable right on account of his not being able to arrange the pre- deposit amount of Rs.8,76,564/-Without depositing this amount, the petitioner's appeal against the order dated 25 May 2023 would not be entertained.

Given the findings in the order dated 25 May 2023 and the statements in the affidavit-in-reply led on behalf of the respondents, the interests of the respondent revenues must be protected. However, such protection must be proportionate and cannot result in the petitioner being deprived of the valuable right to appeal the order

Therefore, by balancing the competing interests, we direct the Axis Bank, Bhayander Branch, to transfer the entire amount in the petitioner's bank account to the Registrar of this Court within two weeks of the parties producing an authenticated copy of this order. In fact we had adjoumed the matter at Mr Pathak's request to enable him to obtain instructions. Mr Pathak, on instructions, submitted that it would be better it the Court made an equitable order.

The Registrar must invest the balance in a suitable fixed deposit with a nationalised bank. This amount will be subject to the Orders-in-Appeal against the order dated 25 May 2023,

Suppose the appeal is instituted within the period indicated above. In that case, the appellate authority must dispose of the appeal on merits without adverting to the limitation issue because, De pointed out earlier, the petitioner instituted this petition within the limitation period or instituting the appeals."

The High Court of Andhra Pradesh in the case of M/s. S.A. IRON AND METAL Vs. THE ASSISTANT COMMISSIONER (ST) & Ors., has held as follows:

Coming to the facts of the present case, the petitioner filed appeal with a delay of 25 days after expiry of three months of statutory period limitation for filing appeal before Commissioner. The reasons assigned for the delay are as follows:

As seen from the order impugned, the learned Commissioner opined that the reasons are not convincing. Pertinent to say that, the learned Commissioner never denied about freezing of bank account of the petitioner and about issuing of notices to the purchasers who are yet to pay consideration to the petitioner

In this context it is necessary to refer Section 107 (6) which is vivid on the point of deposit of 10% of the disputed tax which is mandatory at the time of filing of the appeal. When the bank account of the petitioner is freezed by the authorities, it is a relevant fact to consider the delay since the pre-deposit of 10% disputed tax at the time of filing of the appeal is mandatory. The view taken by the learned Commissioner appears to be forcing the horse to run alter tying the legs. The right of appeal which is created under statute is a substantive right of the party that cannot be denied by taking pedantic view. We are not convinced with the reasons assigned by the learned Commissioner in rejecting the appeal. Since, it is within the condonable period of limitation as the cause for the delay is suffice to entertain the appeal. On appreciation of the language employed under Section 107 (4) and in the back drop the factual and legal background, we are of the view that the impugned order deserves to be set aside."