Rayan Consultants vs. The State Of West Bengal And Ors.

WPA/13519/2024HC CalcuttaGSTCNR WBCHCA024849202424 July 2024Bench: HON'BLE JUSTICE RAJA BASU CHOWDHURY3 pages

AI SummaryRemanded

Facts

The petitioner, Rayan Consultants, challenged an order dated January 30, 2024, passed by the appellate authority under Section 107 of the WBGST/CGST Act, 2017. The petitioner had filed an appeal along with a pre-deposit of 12.5% of the disputed tax amount, as stipulated by notification no. 53 of 2023. However, the appellate authority rejected the appeal, citing non-compliance with the pre-deposit requirements and failure to comply with Sections 107(1) and 107(4) of the Act. The petitioner contended that the pre-deposit was made partly through its electronic cash ledger, and the appellate authority erroneously rejected the appeal without considering this payment or condoning the delay in filing. The respondents acknowledged that if payment was made, it should be credited, suggesting a possible oversight by the appellate authority.

Held

The Court held that the order passed by the appellate authority did not take into account the payment made by the petitioner through its electronic cash ledger, which was annexed to the writ petition. The Court found that the appellate authority had erroneously rejected the appeal on the grounds of non-compliance with the pre-deposit terms, possibly due to an oversight. Furthermore, the Court noted that while the appeal might have been filed belatedly and the order under Section 73 was passed after March 31, 2023, potentially not fitting the criteria of notification no. 53 of 2023, this did not warrant outright dismissal without deciding on the aspect of condonation of delay. The Court emphasized that the petitioner should have been afforded an opportunity to explain the delay, referencing the judgment in S. K. Chakraborty & Sons v. Union of India & Ors. The Court set aside the impugned order and remanded the appeal back to the Appellate Authority. The Appellate Authority was directed to grant the petitioner an opportunity to explain the delay, condone it, and then decide the appeal on merits within eight weeks. Additionally, the Appellate Authority was instructed to ascertain if the entire pre-deposit was paid and, if any deficit was found, direct the petitioner to pay it within two weeks before disposing of the appeal.

Key Issues

1. Whether the appellate authority erred in rejecting the petitioner's appeal without considering the pre-deposit payment made through the electronic cash ledger, contrary to the requirements of notification no. 53 of 2023 and Section 107 of the WBGST/CGST Act, 2017? 2. Whether the appellate authority was justified in dismissing the appeal on grounds of non-compliance with pre-deposit and delay without affording the petitioner an opportunity to explain the delay and seek condonation, as required by principles of natural justice and Section 107 of the WBGST/CGST Act, 2017? Petitioner's Arguments: The petitioner argued that they had complied with the pre-deposit requirement by paying through their electronic cash ledger, and the appellate authority's rejection was erroneous. They also contended that the appellate authority failed to consider condoning the delay in filing the appeal, citing a violation of Sections 107(1) and 107(4) of the Act and notification no. 53 of 2023. They relied on the judgment in S. K. Chakraborty & Sons v. Union of India & Ors. Revenue/State's Arguments: The respondents submitted that if the petitioner had made the payment, credit should be given, and the appellate authority's decision might have been an oversight.

Sections Cited

Section 107, Section 73

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

24.07.2024 Sl. No. 06 g.b. Court No.05 WPA 13519 of 2024 Rayan Consultants -Vs- The State of W. B. & Ors. Mr. Tarun Chatterjee Mr. Pratip Mukherjee Mr. Soumya Sankar Chini Mr. Raju Mondal …..For the Petitioner Mr. U. S. Bhattacharyya Ms. Ekta Sinha …..For C.G.S.T. Authorities Mr. Anirban Ray Mr. T. M. Siddique Mr. Tanoy Chakraborty Mr. Saptak Sanyal ……For the State 1. The present writ petition has been filed, inter alia, challenging the order dated 30th January, 2024 passed under Section 107 of the WBGST/CGST Act, 2017 (hereinafter referred to as ‘the said Act’). The petitioner contends that although the petitioner had filed an appeal along with the pre-deposit as is required for maintaining the appeal in terms of paragraph 3 of the notification no.53 of 2023 being a sum equal to 12.5 per cent of the amount of tax in dispute, the appellate authority has, inter alia, rejected the said appeal on the ground of failure on the part of the petitioner to comply with the terms of the notification no.53 of 2023 as regards the pre-deposit. 2. Mr. Mukherjee, learned advocate representing the petitioner by drawing attention to this court to page 129 of the writ petition submits that notwithstanding the petitioner complying with the terms of the notification and making payment of the part of the pre- deposit through its electronic cash ledger, the appellate authority had erroneously rejected the said appeal. He submits that the appellate authority had also refused to condone the delay in filing the appeal by citing violation of provision of Sections 107 (1) and 107 (4) of the said Act and having recorded that the appeal does not fit the criteria of paragraph 1 and 3 of the above notification no.53 of 2023 dated 2nd November, 2023 had purported to dismiss the said appeal. He submits that this court may be pleased to set aside the order impugned and remand back the appeal for hearing on merits. 3. Mr. Chakraborty, learned advocate representing the respondents submits that if the petitioner has made payment, the petitioner should be given credit therefor. He submits that this may be a case of oversight by the appellate authority. 4. Having heard the learned advocates for the respective parties and having considered the materials on record, I am of the view that the order passed by the appellate authority does not take note of the payment made by the petitioner through its electronic cash ledger (annexure at page 129 of the writ petition). It may be that by reason of oversight the appellate authority had proceeded to reject the said appeal on the ground that the petitioner had not complied with the terms of pre- deposit. 5. It would appear from the order impugned that the appellate authority by citing violation of provisions of Sections 107 (1) and 107 (4) of the said Act had purportedly rejected the said appeal. 6. Although, the appeal was filed belatedly and the order under Section 73 of the said Act having been passed after 31st march, 2023, and the petitioner may not have come within the condition provided in the notification no. 53 dated 2nd November, 2023, 2 however, the same could not have warranted dismissal of the appeal, without deciding on the aspect of condonation of delay. 7. Having taken note of the facts of the case, I am of the view that in the instant case the petitioner should have been afforded an opportunity to explain the delay in filing the appeal having regard to the judgement delivered by the Hon’ble Division Bench of this Court in the case of S. K. Chakraborty & Sons v. Union of India & Ors., reported in (2024) 123 GSTR 229 : 2023

SCC OnLine Cal 4759. To that extent the order impugned appears to be mechanical.

Accordingly, the order impugned is set aside and the appeal is remanded back to the Appellate Authority. Needless to note that the appellate authority shall give an opportunity to the petitioner to explain the delay in preferring the appeal and after condoning the delay shall decide the appeal on merits as expeditiously as possible within a period of eight weeks from the date of communication of this order.

I must note that the appellate authority shall also ascertain whether the petitioner had made payment of the entirety of the pre-deposit and if any deficit is found to, direct the petitioner to make the payment of deficit sum as may be found due within a period of two weeks from the date of communication and thereafter, dispose of the said appeal. 10.With the above observations and directions, the appeal is disposed of.

11.

Urgent Photostat certified copy of this order, if applied for, be supplied to the parties after completion of all necessary formalities. (Raja Basu Chowdhury, J.) 3

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.