Ravi Prakash Banka vs. The State Of Bihar

Held

The Court quashed and set aside the impugned appellate order dated August 5, 2021. The appeal was restored to its original file and number. The Court accepted the petitioner's statement that 10% of the total disputed amount had been deposited, which was a prerequisite for hearing the appeal, and directed that the appeal be decided on merits. If the deposit was not made, it was to be done before the next date. This deposit was to be without prejudice to the rights of the parties and subject to the final order. The Court also directed the de-freezing/de-attaching of the petitioner's bank accounts. The Appellate Authority was directed to condone the delay in filing the appeal, decide the appeal on merits after complying with the principles of natural justice, afford opportunity to parties to present documents, and not take coercive steps against the petitioner during the pendency of the appeal. A fresh speaking order was to be passed by the Appellate Authority within two months from the petitioner's appearance, with liberty reserved to the petitioner to challenge the order if required. The Court explicitly stated that it had not expressed any opinion on the merits of the case, leaving all issues open. The proceedings were to be conducted expeditiously, preferably through digital mode, given the pandemic.

Facts

The petitioner, Ravi Prakash Banka, proprietor of M/s P K Trading Company, challenged an order dated February 6, 2021, passed by the Assistant Commissioner of State Tax, Jamui/Bhagalpur, under Section 73 of the CGST Act, demanding Rs. 12,08,483/- as wrongly availed Input Tax Credit (ITC) of IGST, along with interest and penalty. The petitioner also challenged the subsequent appellate order dated August 5, 2021, passed by the Additional Commissioner of State Tax, which rejected his appeal on grounds of non-receipt of certified copies, rendering it ex-parte. The petitioner contended that his case was covered under Rule 36(4) of the CGST Rules and that the appellate order was passed mechanically without considering his grounds. The Revenue stated it had no objection to the matter being remanded to the Appellate Authority.

Key Issues

1. Whether the appellate order dated August 5, 2021, passed by the Additional Commissioner of State Tax, is liable to be quashed for being ex-parte and passed without considering the petitioner's grounds, contrary to principles of natural justice? 2. Whether the original demand order dated February 6, 2021, passed under Section 73 of the CGST Act, is erroneous on merits, particularly concerning the eligibility of Input Tax Credit under Rule 36(4) of the CGST Rules? Petitioner's contentions: The petitioner argued that the appellate order was passed mechanically, without application of mind, and failed to address the grounds raised. He contended that his claim for Input Tax Credit was valid under Rule 36(4) of the CGST Rules, as amended by Notification No. 30/2020 CT dated April 3, 2020. The petitioner sought quashing of the show-cause notice, the demand order, and the appellate order. Revenue's contentions: The Revenue, through its counsel, stated it had no objection to the matter being remanded to the Appellate Authority for a fresh decision on merits, without taking into account the delay in filing the appeal, and that no coercive steps would be taken against the petitioner during the pendency of the appeal.