Arihant International LTD. vs. Deputy Comms. Of State Tax, Budge Budge Charge And Ors.

Held

The Court held that the petitioner ought to have approached the Appellate Authority under Section 107 of the said Act in the first instance, as an appellate remedy was otherwise available. Regarding the issue of whether the petitioner could be saddled with interest and penalty given the claim of available carry-forward credit, the Court found this to be a question of fact that required decision by the appellate authority. Consequently, the Court directed the petitioner to pay Rs. 50,000/- towards costs to the respondents within four weeks and file an appeal within the same period. Upon presentation of the receipt of costs payment to the Appellate Authority, the Appellate Authority was directed to hear and dispose of the appeal on merits expeditiously, preferably within twelve weeks from the date of communication of the order. The writ petition was disposed of with these directions.

Facts

The petitioner, Arihant International Ltd., filed a writ petition challenging an order dated June 9, 2023, passed under Section 73(9) of the WBGST/CGST Act, 2017. The petitioner's registration was also cancelled by an order dated June 27, 2023, effective from July 1, 2017. An appeal against the cancellation order is pending before the Appellate Authority. The petitioner argued that despite substantial unutilized carry-forward credit in its ledger, it was subjected to interest and penalty, which it contended was contrary to the Act's scheme. The State argued that the petitioner had an alternative remedy of appeal. The petitioner countered that due to the cancellation of its registration, it was unable to file an appeal on the portal.

Key Issues

1. Whether the writ petition is maintainable when an alternative remedy of appeal under Section 107 of the WBGST/CGST Act, 2017, is available to the petitioner? 2. Whether the petitioner can be saddled with interest and penalty, given its claim of having unutilized carry-forward credit in its credit ledger for the tax period 2017-18? Petitioner's Arguments: The petitioner contended that the order levying interest and penalty was de hors the scheme of the Act, especially considering the available unutilized carry-forward credit. They sought setting aside and remand of the impugned order for readjudication. They also argued that due to the cancellation of their registration, they were unable to file an appeal on the portal. State's Arguments: The State argued that the petitioner had an alternative remedy in the form of an appeal under Section 107 of the Act and should have approached the Appellate Authority first instead of filing a writ petition.