Rdb Rasayans Limited vs. Additional Commissioner Of Revenue, Chowringhee Circle And Ors.
Original PDF →Facts
The petitioner, RDB Rasayans Limited, challenged an order dated February 29, 2024, passed by the appellate authority under Section 107 of the CGST/WBGST Act, 2017. This order rejected the petitioner's appeal against a demand raised under Section 73 of the Act for the tax period July 2017 to March 2018. The petitioner was initially served a notice in Form GST ASMT-10 in July 2022 regarding discrepancies, including short payment/excess availment of ITC. Due to the resignation of its primary authorized signatory, the petitioner lost track of the matter until November 2023, when Rs. 10,58,446/- was debited from its electronic credit ledger. The petitioner then filed an appeal, making a pre-deposit of Rs. 264,001/-, but it was filed beyond the limitation period and subsequently rejected by the appellate authority solely on grounds of delay. The petitioner filed the present writ petition as the Appellate Tribunal was not yet constituted, arguing there had been no adjudication on merits.
Held
The Court held that while the petitioner's appeal was admittedly filed beyond the prescribed period and was rightly rejected by the appellate authority on grounds of delay, there had been no adjudication on the merits of the case. The Court noted that the recovery and pre-deposit made by the petitioner had not been accounted for due to the lack of a merits-based decision. Considering that the Appellate Tribunal was yet to be constituted and that reconsideration of the matter would require detailed scrutiny of records and factual issues, the Court found it prudent to remand the matter back to the appellate authority. The Court directed the appellate authority to hear and dispose of the appeal within eight weeks of the communication of the order. Consequently, the demand raised by the respondents in Form GST DRC-07 dated April 13, 2023, for the tax period July 2017 to March 2018, was stayed subject to the final outcome of the appeal, as per Section 107(8) of the Act.
Key Issues
1. Whether the appellate authority erred in rejecting the petitioner's appeal solely on the ground of delay, despite the absence of adjudication on merits and the unavailability of the Appellate Tribunal? (Question of law and mixed fact and law, turning on Section 107 of the CGST/WBGST Act, 2017). Petitioner's arguments: The petitioner contended that the appeal was filed belatedly due to circumstances beyond its control, specifically the resignation of its authorized signatory. It argued that the order passed by the proper officer was ex parte and that there had been no adjudication on the merits of the case. Given that the Appellate Tribunal was not yet constituted, the petitioner submitted that the writ petition was filed to seek a hearing on merits, as otherwise, it would suffer irreparable loss. The petitioner sought a stay of the demand raised. Revenue/State's arguments: The State respondents argued that since the appeal was admittedly filed beyond the prescribed period, the appellate authority was correct in rejecting it. However, the State acknowledged that the payments made by the petitioner required reconciliation, as there had been no adjudication on merits by the appellate authority.
Sections Cited
Section 107, Section 73, Section 107(8)
AI-generated summary — verify with the full judgment below
M/L 46 04.09.2024 sb Ct 5
IN THE HIGH COURT AT CALCUTTA CONSTITUTIONAL WRIT JURI ICTION APPELLATE SIDE
WPA 17587 of 2024
RDB Rasayans Limited Versus The Additional Commissioner of Revenue & Ors.
Mr. Sanjay Dixit
Mr. Rajarshi Chatterjee
Mr. Rajeev Kumar Agarwal
Mr. Subhajit Nath
Mr. Siddharth Agarwal
Ms. Suman Sahani
… For the petitioner.
Mr. Anirban Ray, Ld.GP
Mr. T. M. Siddiqui
Mr. Tanoy Chakraborty
Mr. Saptak Sanyal
Mr. D. Sahu
… For the State.
Affidavit of service filed in Court today is taken on record.
At the very outset Mr. Dixit, learned advocate appearing on behalf of the petitioner submits that he has instruction not to press prayer (b) of the writ petition.
The present writ petition has been filed, inter alia, challenging the order dated 29th February, 2024 passed by the appellate authority under Section 107 of the CGST/WBGST Act, 2017 (hereinafter referred to as the “said Act”) in respect of the tax period July 2017 to March 2018. 2
Mr. Dixit, learned advocate appearing on behalf of the petitioner contends that some times in July, 2022 the petitioner was served with a notice in Form GST ASMT- 10 identifying certain discrepancies, inter alia, including short payment/excess availment of ITC. Although, the petitioner had through its authorized signatory responded to the said notice subsequently, however, by reasons of the primary authorized signatory who was looking after the matter having resigned, the petitioner lost sight of the matter and ultimately was made aware with regard to the disposal of a proceeding initiated under Section 73 of the said Act, in the month of November, 2023 when a sum of Rs.10,58,446/- was debited from the petitioner’s electronic credit ledger on account of recovery of demand. Following the aforesaid, the petitioner had filed an appeal before the appellate authority. Simultaneously with the filing of the appeal the petitioner had made a pre-deposit of Rs.264001/- as was required for maintaining the appeal in addition to the recovery already made. Admittedly, the appeal was filed beyond the period of limitation. The appellate authority by its order dated 29th February, 2024 had rejected the said appeal on the ground of delay. He further submits that although the petitioner has a right to prefer an appeal before the Appellate Tribunal since,
3 the Appellate Tribunal is yet to be constituted, the instant writ petition has been filed. It is submitted that all along there has been no adjudication on merits. The order passed by the proper officer is also an ex parte order. Having regard thereto, it is submitted that unless the writ petition is heard on merits, the petitioner shall suffer irreparable loss. As such pending hearing of this writ petition he prays for stay of the demand raised by the respondents in Form GST DRC - 07 dated 13th April, 2023. 5. Mr. Siddiqui, learned Additional Government Pleader appearing on behalf of the State respondents submits that since admittedly, the appeal was filed beyond the prescribed period, the same has been rightly rejected by the appellate authority. He, however, acknowledges the fact that recovery/payments made by the petitioner requires to be reconciled since, there has been no adjudication on merits by the appellate authority.
Heard the learned advocates appearing for the respective parties and considered the materials on record. Admittedly, in this case a determination has been made under Section 73 of the said Act in respect of the tax period July, 2017 to March, 2018 on 13th April, 2023. Subsequent thereto, a sum of Rs.10,58,446/- has been recovered from the petitioner.
4 Although, the petitioner may have reasons for filing of appeal belatedly, the fact remains, such appeal was rejected on the ground of delay. There has been no adjudication on merits by the appellate authority and as such the payments made by the petitioner towards pre-deposit and the recovery made, has also not been accounted for.
Taking note of the above and considering the fact that the petitioner may have been prevented from filing the appeal within the time prescribed by reasons of its authorized primary signatory resigning, however, without going into such issue it would be prudent to remand the matter back to the appellate authority, having regard to the fact that the Appellate Tribunal is yet to be constituted and reconsideration of the matter would require detailed scrutiny of the records and decision on factual issues.
In view thereof, in the peculiar facts, while remanding the matter back to the appellate authority, I direct the appellate authority to hear out and dispose of the appeal within a period of eight weeks from the date of communication of this order. Since, the appeal has been remanded back the consequence of Section 107(8) of the said Act shall follow in this case and the demand raised by the respondents in Form GST DRC -07 dated
5 13th April, 2023 for the tax period July, 2017 to March, 2018 shall remain stayed subject to final outcome of the appeal.
With the above observations and directions, the writ petition is disposed of.
Urgent Photostat certified copy of this order, if applied for, be made available to the parties upon compliance of requisite formalities.
(Raja Basu Chowdhury, J.)
Reproduced from the public record of the Calcutta High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.