Madhab Patra vs. The Assistant Commissioner, CGST And Cx, Singur Division And Ors.

Held

The Court held that the appellate authority's order dated June 23, 2025, was improper to the extent it rejected the petitioner's appeal concerning Financial Year 2018-19. The appellate authority failed to consider the petitioner's application for waiver under Section 128A and the Board's circular dated March 27, 2025, despite the petitioner having notified his intent and paid the tax liability for that period. The Court found it wholly improper for the appellate authority to ignore these documents. Similarly, the order dated July 21, 2025, passed by the proper officer rejecting the waiver application was also found to be a product of total non-application of mind. The proper officer failed to consider the petitioner's reply to the show-cause notice, which contained explanations for non-furnishing DRC-03A and details supporting his entitlement to waiver. The Court noted the discrepancy in the uploaded orders regarding the consideration of the petitioner's reply. Consequently, the appellate order was set aside concerning FY 2018-19, and the proper officer's order was also set aside. Both authorities were directed to reconsider the matter after giving the petitioner an opportunity of hearing, within four weeks.

Facts

The petitioner, Madhab Patra, challenged an order dated June 23, 2025, passed by the appellate authority under Section 107 of the CGST Act, 2017, which rejected his appeal against an order in original dated March 26, 2024. The original order disallowed Input Tax Credit (ITC) of Rs. 2,46,92,900/- and ordered appropriation of Rs. 2,30,48,532/-. The petitioner had sought to avail benefits under Section 128A of the Act, which provides for waiver of interest and penalty, for Financial Year 2018-19, having paid the tax liability for that period. He had informed the appellate authority of his intent to avail this benefit on March 31, 2025, and applied to the proper officer on June 12, 2025. However, the appellate authority rejected his appeal without considering his application for waiver. Separately, the proper officer rejected the petitioner's waiver application on July 21, 2025, citing non-furnishing of reply and DRC-03A, despite conflicting upload dates and content of summary orders.

Key Issues

1. Whether the appellate authority erred in rejecting the petitioner's appeal for Financial Year 2018-19 without considering his application for waiver of interest and penalty under Section 128A of the CGST Act, 2017, and the Board's circular dated March 27, 2025? Petitioner's argument: The petitioner contended that he was entitled to the benefits of Section 128A as he had discharged his tax liability for FY 2018-19 and had duly applied for waiver. The appellate authority failed to consider his application and the relevant circular, thereby wrongly rejecting his appeal for that period. Revenue's argument: The respondents argued that the impugned orders were sustainable and should not be interfered with. 2. Whether the order passed by the proper officer rejecting the petitioner's application for waiver under Section 128A was arbitrary and based on a non-application of mind, particularly concerning the petitioner's reply to the show-cause notice? Petitioner's argument: The petitioner argued that the proper officer's order was without basis, as evidenced by conflicting orders uploaded on the GST portal and the failure to consider his reply to the show-cause notice, which explained the non-submission of DRC-03A and supported his claim for waiver. Revenue's argument: Not recorded.