Arup Kumar Chatterjee vs. Assistant Commissioner Of State Tax, Vureau Of Investigation (South Bengal) And Ors.

Held

The Court held that the appellate authority under Section 107 of the WBGST Act, 2017/CGST Act, 2017, does not possess the power to waive the mandatory condition of pre-deposit. Therefore, the order impugned, which dismissed the appeal on this ground, could not be faulted in principle. However, considering that the petitioner was not afforded an opportunity to press the appeal on merits due to the non-compliance with the pre-deposit condition and the fact that the Appellate Tribunal was not yet functional, the Court deemed it appropriate to provide an opportunity for the appeal to be heard on merits. The Court clarified that since an amount exceeding 10% of the disputed tax had already been recovered, satisfying the precondition under Section 107(6), the appellate authority should proceed to hear the appeal on merits without requiring further pre-deposit. No refund was ordered due to the delay in approaching the court.

Facts

The petitioner, Arup Kumar Chatterjee, is aggrieved by an order dated May 11, 2023, passed by the appellate authority under Section 107 of the WBGST Act, 2017/CGST Act, 2017. This order dismissed the petitioner's appeal against an earlier order dated November 16, 2022, passed under Section 74 of the said Act. The dismissal was solely on the grounds of non-compliance with the mandatory statutory pre-deposit requirement. The petitioner had sought a waiver of this pre-deposit before the appellate authority, arguing the demand was illegal, but the appeal was dismissed without a hearing on the waiver application. Subsequently, the GST authorities recovered the entire disputed tax. The petitioner approached the High Court, explaining the delay due to financial hardship and the non-functionality of the Appellate Tribunal.

Key Issues

1. Whether the appellate authority under Section 107 of the WBGST Act, 2017/CGST Act, 2017, has the power to waive the mandatory condition of statutory pre-deposit, as stipulated in Section 107(6) of the said Act. Petitioner's arguments: The petitioner contended that the appellate authority erred in dismissing the appeal for want of pre-deposit without first hearing the application for waiver. Furthermore, since the entire disputed tax had been recovered by the respondent GST authorities after the impugned order, the condition of statutory pre-deposit was deemed satisfied, and the petitioner should be allowed to present the appeal on merits. The petitioner also explained the delay in approaching the court due to financial distress and the prolonged non-functionality of the Appellate Tribunal. Revenue/State's arguments: The State argued that the appellate authority has no power to waive the mandatory condition of pre-deposit, and thus the impugned order cannot be faulted.