M/S Skylark Infra Engineering PVT. LTD. vs. Union Of INDIA

Held

The Court held that considering the determination of factual aspects is required before delving into the vires of the provisions, the petitions should be relegated to the remedy of appeal before the GST Tribunal. The Court clarified that the issue of challenging the vires of Section 19(1) of the IGST Act and Section 77(1) of the CGST and RGST Act, 2017, is kept open. The Court further directed that no further recovery proceedings for the balance amount would be taken against the petitioner if the authorities are satisfied that the condition of pre-deposit for filing the appeal has been complied with. The petitioner was also directed to deposit the refunded IGST amount received on these transactions. The GST Tribunal, upon its constitution, shall consider the appeal on merits after being satisfied with the pre-deposit compliance. The petitioner has three months from the Tribunal's constitution to file the appeal.

Facts

The petitioner, M/s. Skylark Infra Engineering Pvt. Ltd., filed writ petitions challenging an order dated 23.09.2022 by the Appellate Authority, State Tax, Jaipur, which rejected their appeal for the assessment year 2017-18. The petitioner had treated certain supplies as inter-state, liable to IGST, while the respondent No. 3 classified them as intra-state, levying CGST and SGST. The petitioner contended they had already deposited the IGST. The petitions also challenged the vires of Section 19(1) of the IGST Act and Section 77(1) of the CGST and RGST Act, 2017. An interim order required the petitioner to deposit 65% of the CGST and RGST, subject to a refund of IGST. The petitioner reported depositing the refunded IGST amount with the GST authorities, arguing this complied with the pre-deposit requirement for appeal to the Tribunal.

Key Issues

1. Whether the petitioner has complied with the pre-deposit requirement for filing an appeal before the GST Tribunal, considering the refund of IGST and subsequent deposit of that amount with the State GST authorities? 2. Whether Section 19(1) of the IGST Act and Section 77(1) of the CGST and RGST Act, 2017, are intra vires the Constitution? Petitioner's arguments: The petitioner argued that by depositing the refunded IGST amount with the GST authorities, they have fulfilled the pre-deposit condition for filing an appeal before the GST Tribunal. They also contended that other amounts had already been deposited. Revenue's arguments: The judgment does not explicitly record arguments from the revenue regarding the pre-deposit compliance. However, the court's direction to deposit the refunded IGST amount suggests a concern about the completeness of the pre-deposit. The revenue's stance on the vires of the sections is not recorded.