Chetankumar Jasraj Palgota (HUF) vs. State Of Maharashtra And Ors
Held
The Court held that the Petitioner's prayer for adjustment of the Rs.1 Crore deposit as pre-deposit for the maintainability of the appeal was justified and squarely covered by the decision in *Vinod Metal (supra)*. The Court reasoned that a deposit made "under protest" without an existing demand cannot be retained by the respondents without authority of law. The distinction made by the respondents regarding the section under which the order was passed (Section 74 vs. Section 73) was found to be untenable. The core issue was whether a deposit made "under protest" without a demand could be treated as a pre-deposit, which the Court affirmed based on the *Vinod Metal* precedent. The Court also noted that the Respondents stated no credit was blocked, and even if it were, the one-year period under Section 83 had expired, causing the attachment to cease by operation of law. The Court directed the Respondents to treat the Rs.1 Crore as pre-deposit, decided the appeal on merits, and declared the blocked input tax credit defreezed by operation of law.
Facts
The Petitioner, Chetankumar Jasraj Palgota HUF, engaged in bullion trading, challenged an order dated 19.04.2022 by Respondent No.3 which blocked its Input Tax Credit (ITC). The Petitioner deposited Rs.1 Crore under protest on 25th and 26th April 2022. Subsequently, an Order-in-Original dated 29th August 2022 raised a tax demand of Rs.7,32,73,629/- for the period 2021-22. The Petitioner filed an appeal, requesting the adjustment of the Rs.1 Crore deposit as pre-deposit under Section 107(6) of the MGST Act. This request was rejected by the Appellate-Authority. The Petitioner also sought directions to consider the deposit as sufficient compliance and accept the appeal, and for the blocking of credit to be considered lifted as the one-year period under Section 83 had expired.
Key Issues
1. Whether a voluntary deposit made "under protest" without an existing demand can be treated as a pre-deposit for filing an appeal under Section 107(6) of the CGST/MGST Act? The Petitioner argued that the Rs.1 Crore deposited "under protest" should be adjusted as pre-deposit, citing the High Court's decision in *Vinod Metal Vs. State of Maharashtra* which held that such deposits should be considered for pre-deposit requirements. The Petitioner also contended that the blocking of credit should cease as the one-year period under Section 83 had expired. The Respondents argued that the Rs.1 Crore deposit was voluntary and could not be treated as pre-deposit, distinguishing the *Vinod Metal* case as it involved an order under Section 73, not Section 74. They also stated that no credit was blocked, rendering that prayer misconceived.
Sections Cited
Section 107(6), Section 83, Section 83(2), Section 74, Section 73(5)
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Tauseef
10-WP.14095.2022.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.14095 OF 2022 Chetankumar Jasraj Palgota HUF ...Petitioner Versus State of Maharashtra & Ors. ...Respondents WITH INTERIM APPLICATION NO.464 OF 2023 IN WRIT PETITION NO.14095 OF 2022 Chetankumar Jasraj Palgota HUF ...Applicant/Petitioner Versus State of Maharashtra & Ors. ...Respondents ******** Mr. Brijesh Pathak for the Petitioner. Ms. Shruti D. Vyas, Addl. G.P. a/w. Ms. P. N. Diwan, AGP for Respondent (State). ******** CORAM : G. S. KULKARNI, JITENDRA JAIN, J.J.
DATE : 4th DECEMBER, 2023. P.C.
By this petition under Article 226 of the Constitution of India, the Petitioner has prayed for various relief, however at the time of the hearing the Petitioner has pressed prayer clause (b) which reads thus:- “(b) Issue a writ in the nature of certiorari or any other appropriate writ or order thereby quashing the impugned Order dated 19.04.2022, Exhibit A, issued by the Respondent No.3 along with consequential reliefs;” 1 of 8 TAUSEEF LAIQUEE FAROOQUI Digitally si
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