M/S.Sree Balaji Traders vs. The Commissioner Of GST And Central Excise (Appeals)

Facts

The petitioner, M/s. Sree Balaji Traders, filed a writ petition challenging an order dated 30.10.2023 passed by the Commissioner of GST & Central Excise (Appeals). The appeal filed by the petitioner against an order in original dated 23.11.2022 was rejected by the first respondent on the grounds of non-compliance with the mandatory pre-deposit requirement of 10% of the disputed tax amount, which was stated to be Rs. 37,53,559/-. The petitioner contended that they were not put on notice regarding this non-compliance and would have demonstrated compliance if given an opportunity. The respondents argued that pre-deposit is a sine-qua-non for maintaining an appeal and can be examined by the appellate authority even at the hearing stage.

Held

The Court found merit in the petitioner's grievance that their appeal was dismissed without being put on notice of the alleged non-compliance with the pre-deposit requirement. The Court held that this denial of an opportunity to demonstrate compliance violated the principles of natural justice. Consequently, the Court decided to remit the matter back to the appellate authority. The petitioner will be required to establish that all conditions for filing the appeal, including the pre-deposit, have been met. If the petitioner successfully demonstrates compliance, the appellate authority shall proceed to decide the appeal on its merits. However, if the petitioner fails to establish compliance, the impugned order of dismissal shall stand revived. The Court expressly left undecided the merits of the appeal itself, focusing solely on the procedural aspect of notice.

Key Issues

1. Whether the appeal filed by the petitioner was liable to be rejected for non-compliance with the mandatory pre-deposit under Section 107(6)(b) of the CGST Act, 2017, without putting the petitioner on notice regarding such non-compliance? Petitioner's arguments: The petitioner argued that the rejection of their appeal without prior notice of the alleged non-compliance with the pre-deposit requirement violated the principles of natural justice. They contended that had they been informed, they could have presented evidence to demonstrate compliance with Section 107(6) of the CGST Act. The petitioner also submitted that they had made submissions on merits before the appellate authority. Respondents' arguments: The respondents argued that compliance with the pre-deposit condition is a mandatory prerequisite for the maintainability of an appeal, and the appellate authority has the right to examine this aspect even during the hearing. They asserted that an appeal filed without fulfilling this condition is liable for dismissal.