M/S Bishnu Flour Mills PVT. LTD. vs. The Union Of INDIA

Held

The Court held that the order dated 08.05.2024 passed by the Joint Commissioner of State Tax was a non-speaking order, lacking essential details and reasoning. The Court emphasized that quasi-judicial authorities must pass speaking orders, supported by cogent reasons, to facilitate judicial review and ensure transparency, citing the Supreme Court's decision in Oryx Fisheries Private Limited. Since the original adjudicating authority's order was flawed, the subsequent appellate order, which rejected the appeal based on non-compliance with pre-deposit requirements without addressing the substantive issue, was also set aside. The Court directed the authority who passed the order dated 08.05.2024 to pass a fresh, detailed, and speaking order after providing an oral hearing to the petitioner, if statutorily provided. This exercise was to be completed within three months. The writ petition was allowed.

Facts

The petitioner, M/s Bishnu Flour Mills Pvt. Ltd., filed a writ petition challenging an order dated 09.09.2024 passed by the Additional Commissioner of State Tax (Appeal), Purnea Division, which rejected their appeal. The rejection was based on the ground that the petitioner had not paid 10% of the disputed amount while filing the appeal. The petitioner argued that they were claiming a refund of excess deposit of Input Tax Credit (ITC) on export of goods and services without payment of IGST, and therefore, there was no disputed tax amount to be deposited. The petitioner also challenged an earlier order dated 16.05.2024 by the Joint Commissioner of State Tax, Katihar Circle, which rejected their refund application. This rejection was purportedly due to non-reply to a show cause notice, despite a prior order on 05.04.2024 allowing the refund. The Joint Commissioner's subsequent rejection cited a CAG Report from 2008-09, alleging a pending tax amount of Rs. 97.28 lakhs against the petitioner, without providing supporting documents.

Key Issues

1. Whether the Appellate Authority was justified in rejecting the petitioner's appeal solely on the ground of non-payment of 10% of the disputed amount, when the petitioner was seeking a refund of excess deposit and not challenging a tax demand, as per Section 107 of the BGST Act, 2017? 2. Whether the Joint Commissioner of State Tax erred in rejecting the petitioner's refund application by issuing a non-speaking order, without proper justification, and relying on an unsubstantiated claim from a CAG Report, contrary to Section 54(5) of the GST Act, 2017? Petitioner's Arguments: The petitioner contended that the Appellate Authority's decision to reject the appeal for non-payment of the pre-deposit was erroneous because the appeal was against a refund rejection, not a tax demand. They argued that they were claiming an excess deposit, not disputing any tax liability. Regarding the refund rejection, the petitioner argued that the Joint Commissioner passed a non-speaking order, failed to provide proper reasons, and relied on an unverified CAG report without providing supporting documents or a demand notice. They sought a direction to provide the CAG report for FY 2008-09. Revenue's Arguments: The judgment does not record any specific arguments made by the respondents (Union of India and State of Bihar).