Commissioner Of CGST And Cx Kolkata South Commissionerate vs. M/S Ktech Engineering Builders Company PVT LTD

Held

The High Court held that since the adjudicating authority had already passed an order against the respondent/assessee, and the respondent had filed a further appeal before the Commissioner (Appeals), all issues could be canvassed in that pending appeal. Consequently, the Court found no reason to disturb the order passed by the learned Tribunal. The Court explicitly stated that the substantial questions of law raised by the revenue were left open. The reasoning was that the ongoing appellate proceedings before the Commissioner (Appeals) provided a sufficient avenue for resolving all contentious issues, rendering the revenue's appeal before the High Court unnecessary to decide the merits of the Tribunal's decision to dismiss the appeal as infructuous. The operative direction was that the revenue's appeal was disposed of on this ground.

Facts

The Commissioner of CGST and CX, Kolkata South Commissionerate (appellant/revenue) filed an appeal before the Calcutta High Court against an order of the Custom, Excise and Service Tax Appellate Tribunal (Tribunal). The Tribunal had dismissed the revenue's appeal as infructuous. The dispute originated from an order in original dated February 28, 2018, concerning a refund claim. The Commissioner (Appeals) had allowed the appellant's appeal on September 10, 2021, setting aside the order in original and directing a reconsideration of the refund claim, specifically noting that the Military Engineering Service (MES) should also pursue the claim and be joined as a co-applicant. Subsequently, the adjudicating authority passed a new order on February 8, 2022, which was against the respondent, leading the respondent to file a further appeal before the Commissioner (Appeals).

Key Issues

1. Whether the Tribunal's observation that the departmental appeal had become infructuous is erroneous and suffers from legal infirmity, violating principles of natural justice by failing to provide an independent finding on the legal points raised by the appellant (revenue)? This question turns on the interpretation of the Tribunal's procedural obligations and the impact of subsequent developments on the appeal's maintainability. 2. Whether the Tribunal was prevented from deciding the department's appeal on merits when the appellate order was under challenge before it, and whether compliance with the appellate order by the adjudicating authority renders the department's appeal infructuous? This issue concerns the legal effect of de novo adjudication on an ongoing appeal before the Tribunal. Arguments for the Appellant (Revenue): The revenue argued that the Tribunal erred in dismissing their appeal as infructuous without deciding the legal points on merits. They contended that the subsequent de novo adjudication and the order against the respondent did not make their appeal infructuous and that the Tribunal should have addressed the merits of their challenge to the Commissioner (Appeals)'s direction regarding MES. Arguments for the Respondent: The respondent argued that since the adjudicating authority had passed a new order against them, and they had filed a further appeal before the Commissioner (Appeals), all issues could be canvassed in that pending appeal. Therefore, the Tribunal's order should not be disturbed.