Mohan Kumar Agarwala vs. Senior Joint Commissioner Of Revenue (SGST), Raiganj Charge And Ors.

Held

The Court held that the appellate order dated 19th September, 2024, was unsustainable due to a lack of reasoning. Specifically, the Court noted that no reasons were provided by the appellate authority for reducing the refund by considering the "Adjusted Total Turnover" as Rs. 2,76,25,63,943/- instead of Rs. 2,29,53,61,432/-. The Court found this omission to be a critical flaw. Consequently, the appellate order was quashed. The Court directed the appellate authority to provide the petitioner with an opportunity of hearing before passing a fresh order. This fresh order is to be passed within three months from the date of the High Court's judgment. The issue of the correct calculation of "Adjusted Total Turnover" was not decided on merits but remanded for fresh consideration.

Facts

The petitioner, Mohan Kumar Agarwala, challenged an order passed by the appellate authority, the Senior Joint Commissioner of Revenue (SGST) & Ors. The petitioner had appealed an earlier adjudication order. The appellate authority accepted the petitioner's contention regarding the formula for "Adjusted Total Turnover" under Rule 89(4)(E) of the CGST Rules, 2017, acknowledging that it does not include exempt supplies. However, the appellate authority, without providing reasons, used a different value of Rs. 2,76,25,63,943/- as "Adjusted Total Turnover" instead of the petitioner's stated correct value of Rs. 2,29,53,61,432/-. This modification reduced the disallowed refund from Rs. 30,75,868/- to Rs. 17,78,306/-, and the refund allowed at the appellate stage was Rs. 17,78,306/-. The impugned appellate order is dated 19th September, 2024.

Key Issues

1. Whether the appellate authority erred in law by failing to record reasons for deviating from the accepted formula of "Adjusted Total Turnover" and using a different value (Rs. 2,76,25,63,943/-) than that argued by the petitioner (Rs. 2,29,53,61,432/-) in the context of Rule 89(4)(E) of the CGST Rules, 2017. Petitioner's Contention: The petitioner argued that while the appellate authority accepted their submission on the definition of "Adjusted Total Turnover" excluding exempt supplies, it subsequently used an unexplained and incorrect value for this calculation, thereby reducing the refund. The petitioner contended that the appellate order lacked reasoning for this specific calculation. Revenue's Contention: The respondent authorities were present, and arguments were heard. The judgment does not explicitly record specific arguments made by the revenue authorities beyond their presence and the perusal of the appellate order.