Pankaj Sharma vs. The Union Of INDIA
Original PDF →Facts
The petitioner, Pankaj Sharma, challenged an order-in-appeal dated January 28, 2021, passed by the Additional Commissioner of State Taxes (Appeal), Saran Division, Chhapra. This appellate order dismissed the petitioner's appeal solely on the ground of not submitting the certified copy of the impugned order in time. The petitioner also sought to quash the original assessment order dated March 6, 2020, passed by the Assistant Commissioner of State Tax, Saran, Chhapra, and the consequential demand notice for tax, interest, and penalty totaling Rs. 19,81,531/- for the period April 2018 to March 2019. The petitioner had deposited 100% of the demanded amount to mature the appeal for hearing on merits. The revenue had no objection to the matter being remanded.
Held
The Court set aside the impugned order dated January 28, 2021, passed by the Additional Commissioner of State Taxes (Appeal), Saran Division, Chhapra. The Court noted that the appellate order was cryptic and lacked the necessary reasoning to be self-explanatory or comprehensible, leading to the dismissal of the petitioner's appeal on a procedural ground without considering the merits. This prejudiced the petitioner's case. The Court also noted that the petitioner had deposited 100% of the demanded amount. In view of the agreement between the parties, the matter was remanded to the appellate authority for a decision on merits. The petitioner was directed to appear before the appropriate authority on June 16, 2021, and both parties were granted an opportunity to present all essential documents. The appellate authority was directed to decide the appeal expeditiously, preferably within two months, in compliance with the principles of natural justice. The Court explicitly stated that it had not expressed any opinion on the merits of the case, and all issues, including the constitutional validity of Section 16(4) of the CGST/BGST Act and amended Rule 61(5) of the CGST/BGST Rules, were left open for consideration by the appellate authority. The petitioner was also granted liberty to challenge the order if so required.
Key Issues
1. Whether the order-in-appeal dated January 28, 2021, passed by the Additional Commissioner of State Taxes (Appeal) is liable to be quashed for failing to provide cogent reasons and for dismissing the petitioner's appeal on a procedural technicality without considering the merits, thereby violating principles of natural justice? 2. Whether Section 16(4) of the Central/Bihar Goods and Services Act, 2017, is ultra vires the Constitution of India (Articles 14, 19(1)(g), 300A) and violative of Section 16(1) and (2) and the basic structure of the Act? 3. Whether Rule 61(5) of the Central/Bihar Goods and Services Rules, 2017, as amended retrospectively, is ultra vires the Constitution of India (Articles 14, 19(1)(g), 300A) and violative of Section 16(1) and (2) and the basic structure of the Act? Petitioner's arguments: The appellate order was cryptic, lacked reasons, and prejudiced the petitioner's case. The petitioner also challenged the constitutional validity of Section 16(4) of the CGST/BGST Act, 2017, and amended Rule 61(5) of the CGST/BGST Rules, 2017, on grounds of being arbitrary, discriminatory, and violative of fundamental rights and the basic structure of the Act. The petitioner sought an alternative declaration that these provisions were not applicable to their case. Revenue's arguments: The Standing Counsel for CGST & CX and the SC-11 for the State had no objection to the matter being remanded to the appellate authority for consideration on merits.
Sections Cited
Section 16(4), Section 16(1), Section 16(2), Rule 61(5), Section 83
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
FINAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) ===================================================== (The proceedings of the Court are being conducted by Hon’ble the Chief Justice/ Hon’ble Judges through Video Conferencing from their residential offices/residences. Also, the Advocates and the Staffs joined the proceedings through Video Conferencing from their residences/offices.)
Date : 01-06-2021
Learned counsel for the parties desire the matter be taken up today.
2/7 Petitioner has prayed for the following relief(s):- “(i) For issuance of a writ in the nature of Certiorari or any other appropriate writ or order for quashing of order-in-appeal dated 28/01/2021 passed by the respondent no. 4, the Additional Commissioner of State Taxes (Appeal), Saran Division, Chhapra whereby the appeal of the petitioner was dismissed only on the ground that the appellant has not submitted the certified copy of the impugned order in time, and further be pleased to quash the assessment order-in- original contained in Ref. No. ZAl003200086l3H dated 06/03/2020 passed under the signature of respondent no. 5 and the consequential demand notice contained in Form GST DRC-07 dated 06/03/2020 levying tax amounting to Rs. 17,11, 111.19/- (Rs. Seventeen lacs, eleven thousand, one hundred and eleven and nineteen parse only) alongwith interest of Rs. 93,540.67/- (Rs. Ninety three thousand, five hundred and forty and sixty seven paise only) and penalty of Rs. 1,76,879.28/- (Rs. One lacs and seventy six thousand eight hundred and seventy nine and twenty eight parse only), totalling to Rs. 19,81,531/- (Rs. Nineteen lacs, eighty one thousand, five hundred and thirty one only) for the period April 2018 to March 2019 — Financial Year 2018-19. 3/7 (ii) For issuance of an appropriate writ, order or direction for holding and declaring the Section 16(4) of the Central / Bihar Goods and Service Act, 2017 as ultra vires the provisions of Article 14, 19(1)(g) and 300A of the Constitution of India and also being violative of Section 16(1) and (2) and the basic structure of CGST/BGST Act, 2017. (iii) For issuance of an appropriate writ, order or direction for holding and declaring the Rule 61(5) of the Central / Bihar Goods and Service Rules, 2017 as amended by notification no. 49/2019 with retrospective date of 01.07.2017, as ultra vires the provisions of Article 14, 19(1)(g) and 300A of the Constitution of India and also being violative of Section 16(1) and (2) and the basic structure of CGST/BGST Act, 2017. (iv) In alternate be pleased to hold and declare that Section 16(4) of the CGST/BGST Act, 2017 and amended Rule 61(5) of the CGST/BGST Rules, 2017 are not applicable in the case of the petitioner. (v) Be pleased to stay the operation of the demand notice contained in Form GST DRC-07 dated 06/03/2020 levying tax amounting to Rs. 17,1l,1ll.19/- (Rs. Seventeen lacs, eleven thousand, one hundred and eleven and nineteen 4/7 paise only) alongwith interest of Rs. 93,540.67/- (Rs. Ninety three thousand, five hundred and forty and sixty seven paise only) and penalty of Rs. 1,76,879.28/- (Rs. One lacs and seventy six thousand eight hundred and seventy nine and twenty eight paise only), totalling to Rs. 19,81,531/- (Rs. Nineteen lacs, eighty one thousand, five hundred and thirty one only) for the period April 2018 to March 2019 — Financial Year 2018-19, during the pendency of the present writ application. (vi) For issuance of a writ in the nature of certiorari for quashing of the attachment order dated 12/02/2021 (Annexure II) issued by the respondent no. 5 as being without competence and juri iction and violative of mandate of Section 83 of GST Act, and further be pleased to issue the writ of mandamus, or any other appropriate writ or direction, commanding the respondents to withdraw the attachment orders and unfreeze the following bank accounts of the petitioner (1) Bank account no. 60220844946 in the name of Jagdamba hardware, (2) Bank account no. 60332637456 and (3) Bank account no. 60175677940 both in the name of the petitioner Pankaj Sharma, all three bank accounts are with the Bank of Maharashtra, Chhapra branch, and further be pleased to restrain the respondents from taking any coercive 5/7 action against the petitioner. (vii) For issuance of any other appropriate writ, order or direction which Your Lordships may deem fit and proper in the facts and circumstances of the case.”
We notice that the impugned order dated 28/01/2021 passed by the respondent no. 4, the Additional Commissioner of State Taxes (Appeal), Saran Division, Chhapra, cryptic in nature, needs to be set aside only on the ground that it does not even contain the reasons necessarily required for making the order self- explainable and/or comprehensible. The Appellate Authority summarily dismissed the appeal without assigning any cogent reason, thus, seriously prejudicing the petitioner’s cause and case. It is stated before this Court that the petitioner has already deposited 100 per cent of the amount making the appeal mature to be heard on merits. On the other hand, Shri Vikash Kumar, learned Standing Counsel No. 11, states that he has no objection with the matter being remanded to the appellate authority for consideration of the petitioner’s case on its own merit in accordance with law. In view of the same, the petition stands disposed of in 6/7 the following mutually agreeable terms:- (a) Impugned order dated 28/01/2021 passed by the respondent no. 4, the Additional Commissioner of State Taxes (Appeal), Saran Division, Chhapra stands set aside; (b) Petitioner shall appear before the appropriate authority on 16th of June, 2021 at 10:30 A.M., if possible through digital mode; (c) Opportunity shall be granted to the parties to place on record all essential documents and materials, if so required and desired; (d) Petitioner through learned counsel undertakes to fully cooperate in such proceedings and not take unnecessary adjournment; (e) The appellate authority shall decide the appeal on merits expeditiously, preferably within a period of two months from the date of appearance of the petitioner, in compliance of the principles of natural justice; (f) Equally, liberty reserved to the parties to take recourse to such other remedies as are otherwise available in accordance with law; (g) We are hopeful that as and when petitioner takes recourse to such remedies, as are otherwise available in law, 7/7 before the appropriate forum, the same shall be dealt with, in accordance with law and with reasonable dispatch. (h) We have not expressed any opinion on merits and all issues are left open; (i) If possible, proceedings during the time of current Pandemic [Covid-19] would be conducted through digital mode; (j) Liberty reserved to the petitioner to challenge the order, if required and desired. The instant petition sands disposed of in the aforesaid terms. Interlocutory Application(s), if any, also stands disposed of. Learned counsel for the respondents undertakes to communicate the order to the appropriate authority through electronic mode.
Sujit/PKP-
(Sanjay Karol, CJ)
(S. Kumar, J)
AFR/NAFR CAV DATE Uploading Date Transmission Date
Reproduced from the public record of the Patna High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.