Ramanathan Vairavan vs. The Deputy Commissioner (GST)

Facts

The petitioner, Ramanathan Vairavan, filed three writ petitions challenging orders passed by the State Tax Officer (2nd respondent) under Section 74(9) of the TN/CGST Act, 2017, read with Rule 142(5) of the TN/CGST Rules, 2017, for the assessment years 2019-20, 2021-22, and 2022-23. These orders were preceded by notices in DRC 01. The petitioner had appealed these orders to the Deputy Commissioner (GST), Appeal (1st respondent), but the appeals were rejected due to significant delays (76 and 83 days) beyond the condonable period, citing the Supreme Court's decision in Singh Enterprises. The petitioner had pre-deposited 10% of the disputed tax at the time of filing the appeals. The impugned orders stemmed from an inspection conducted by the Intelligence Wing of the department between November 15-17, 2023.

Held

The Court held that the appeals filed by the petitioner before the first respondent should be considered on merits, notwithstanding the delay. The reasoning was based on the fact that the petitioner had already pre-deposited 10% of the disputed tax and was actively pursuing the matter. The Court directed the first respondent to dispose of the appeals on merits, without reference to the period of limitation, provided the petitioner deposits an additional 15% of the disputed tax in cash within 30 days. This deposit, along with the already deposited 10%, would total 25% of the disputed tax. The appellate authority was instructed to dispose of the appeals within six months thereafter. An interim stay of recovery proceedings was granted for 30 days, conditional upon the petitioner making the additional 15% deposit. The ratio decidendi is that in cases where a significant portion of tax is pre-deposited and the assessee is actively litigating, the appellate authority should consider the appeals on merits even if filed with a delay, provided further pre-deposits are made.

Key Issues

1. Whether the appellate authority (1st respondent) erred in rejecting the petitioner's appeals solely on the grounds of delay, despite the petitioner having pre-deposited 10% of the disputed tax and seeking to agitate the matter on merits? Petitioner's contention: The petitioner argued that the appeals should be considered on their merits, especially since a substantial portion of the tax had been pre-deposited, and the rejection was based purely on procedural delay. The petitioner sought a fresh assessment with an opportunity for a personal hearing. Revenue's contention: The respondents relied on the Supreme Court's decision in Singh Enterprises v. Commissioner of C.Ex., Jamshedpur, to justify the rejection of appeals filed beyond the condonable period of limitation. No other specific arguments were recorded for the revenue.