Vera Display And Storage Products PVT. LTD vs. State Tax Officer (Intelligence)

Facts

The appellant, Vera Display and Storage Products Pvt. Ltd., challenged an order passed by the State Tax Officer (Intelligence) under Section 129 of the CGST and KGST Acts, which imposed a tax and penalty of Rs. 9,03,190/-. The appellant had filed a writ petition before the High Court, arguing that the order was illegal due to denial of personal hearing. The learned Single Judge dismissed the writ petition, holding that the appellant had a statutory remedy of appeal. The Single Judge also stayed the encashment of the Bank Guarantee furnished by the appellant for two weeks to allow the appellant to pursue the appeal and move for a stay before the Appellate Authority. The appellant then filed this writ appeal against the Single Judge's judgment.

Held

The Court held that the ground of denial of personal hearing, as alleged by the appellant, is a matter that can be agitated before the statutory Appellate Authority. Therefore, the Court was not persuaded to interfere with the Single Judge's decision on this ground. Regarding the issue of the 10% pre-condition for appeal, the Court observed that this point was not raised before the learned Single Judge and that a statutory appeal had not yet been filed. The Court stated that if the appellant intended to seek exoneration or waiver from the pre-conditions, they should take steps before the Appellate Authority or any other appropriate forum. Since this issue was not raised at the time of the writ petition's disposal, the Court did not decide on its merits. The Court modified the impugned judgment by directing that the encashment of the Bank Guarantee be kept in abeyance until the disposal of the appeal, provided the appellant keeps the Bank Guarantee valid until the disposal of a validly constituted appeal within one month from the date of the judgment. The respondents were directed not to pursue recovery steps until the disposal of such an appeal.

Key Issues

1. Whether the learned Single Judge ought to have considered the writ petition on merits, specifically on the ground of denial of personal hearing in the impugned order (Ext.P5)? 2. Whether the pre-condition of depositing 10% of the disputed amount for filing an appeal under Section 107(6) of the CGST and KGST Acts would cause prejudice to the appellant, given that the entire disputed amount is secured by a Bank Guarantee? Contentions of the Appellant: The appellant argued that the learned Single Judge should have considered the writ petition on its merits, as the impugned order suffered from the illegality of denying an opportunity for personal hearing. Regarding the appeal pre-condition, the appellant contended that insisting on a 10% deposit would be prejudicial because the entire disputed amount is already secured by a Bank Guarantee, which the department can encash if the appeal is dismissed. They argued that even if the appeal is dismissed, the department would have to refund the deposit as the Bank Guarantee covers the amount. Contentions of the Revenue: The learned Government Pleader, relying on settled legal precedents, contended that the pre-condition for depositing 10% of the disputed amount is mandatory as long as the provision remains valid, and a waiver cannot be permitted.