Punnamada Resorts PVT LTD vs. Inspecting Assistant Commissioner/Deputy Commissioner

Sri.A.Krishnan, the learned counsel for the petitioner contended that the statutory provision for deposit of 10% of the disputed tax amount is too onerous for the petitioner to comply with and therefore the same will stand as an embargo in the petitioner pursuing the statutory remedies and hence the said mandate ought to be ignored in the present case. He further submitted that the right of an assessee to pursue the remedy of an appeal against an unjust and illegal assessment order cannot be curtailed by imposing a huge pre-deposit and he thus assails the order and submits that if the petitioner is granted an opportunity to pursue the matter in appeal without the pre-deposit. It was submitted that in all probabilities, the appeal itself will be allowed.

Smt.M.M.Jasmin, the learned Government Pleader, on the other hand contended that the statutory mandate shall not be interfered with by recourse to Article 226 of the Constitution of India. It was also submitted that in several decisions, this Court as well as the Supreme Court have held that when a statutory pre-deposit is provided for, the courts should not interfere by granting any reduction or waiver of such a pre-deposit.

On a consideration of the rival contentions, I am of the view that the contentions raised by the petitioner is not legally tenable. The provisions of Section 107 under the CGST Act provides for a pre- deposit of 10% of the disputed tax amount. The requirement of deposit of 10% of the disputed tax amount cannot be termed to be too onerous or unconscionable so as to make it arbitrary contrary to the provisions of the Constitution, especially in the circumstances of this case.

In view of the above, the demand of the petitioner to waive the statutory pre-deposit is unsustainable and cannot be directed by recourse to Article 226 of the Constitution of India. Therefore the challenge against Ext.P3 and Ext.P3(a) to Ext.P3(j) does not survive and the same is rejected. On noticing the disinclination of this Court to interfere with Ext.P3 to Ext.P3(j) orders, the learned counsel for the petitioner attempted to persuade this Court to grant a reasonable time to the petitioner to deposit the mandatory pre-deposit.

After considering the circumstances of the case as well as the prevailing situation, this Court is of the view that since the petitioner had been bonafide pursuing his attempt to overcome the mandatory pre- deposit, grant of a reasonable time will not prejudice the interests of the revenue and on the other hand will cater to the interest of the assessee as well as the Revenue. In view of the above, there will be a direction to the 2nd respondent to accept the pre-deposit contemplated under Section 107 of the CGST Act in respect of the appeals filed by the petitioner for the months of May 2018 to March 2019, if the petitioner deposits the mandatory pre-deposit within a period of two weeks from the date of receipt of a copy of this judgment. To enable reconsideration of the appeals, Ext.P3 and Ext.P3(a) to Ext.P3(j) shall stand set aside and the appeals be restored back to file provided the petitioner deposits the pre-deposit within two weeks. The writ petition is disposed of as above. BECHU KURIAN THOMAS, JUDGE RKM