Sodexo INDIA Services PVT. LTD. vs. The Union Of INDIA And Ors

Held

The Court quashed and set aside the impugned orders dated April 13, 2022. The Court found that there was confusion regarding the acceptance of pre-deposit payments made through Form GST DRC-03 for appeals under the Service Tax law, which was a matter requiring resolution by the Central Board of Indirect Taxes and Customs (CBI & C). The Court noted that the Commissioner (Appeals) himself had raised this issue with higher authorities. The Court directed Respondent no.3 to hear the Petitioner denovo and pass fresh orders on merits after granting a personal hearing. The Court also forwarded a copy of the order to the CBI & C with a direction to consider the issue and issue suitable clarifications/guidelines. The Court explicitly stated that no observations were made on the merits of the matter.

Facts

The Petitioner, Sodexo India Services Pvt. Ltd., challenged four orders dated April 13, 2022, passed by Respondent no.3, the Commissioner (Appeals). The Petitioner had filed appeals against certain demands and made pre-deposits in cash through Form GST DRC-03, as required under Section 85 of the Finance Act, 1994, read with Section 35F of the Central Excise Act, 1944. The appeals were registered, and personal hearings were held. However, all appeals were dismissed by Respondent no.3 solely on the ground that the pre-deposit made was improper, without considering the merits of the Petitioner's submissions. The impugned orders admitted that the pre-deposit amounts were made via DRC-03. The Commissioner (Appeals) later filed an affidavit stating that the law and circulars do not permit pre-deposit in the manner made and that such payments under old laws cannot be used for CGST Act payments.

Key Issues

1. Whether the pre-deposit made by the Petitioner through Form GST DRC-03, in compliance with Section 85 of the Finance Act, 1994, read with Section 35F of the Central Excise Act, 1944, was improper, leading to the dismissal of appeals without considering their merits? Petitioner's Contention: The Petitioner argued that they had made the pre-deposit as required, and the appeals were accepted and registered. They were not informed during the personal hearing about any impropriety in the deposit method. The impugned orders themselves acknowledged the payment. The Petitioner relied on the fact that the payment was made through DRC-03, which is a recognized mode under CGST laws. Revenue's Contention: The Revenue, through the Commissioner (Appeals), contended that the law and circulars do not permit pre-deposit in the manner made by the Petitioner. They argued that proceedings under the Central Excise Act, 1944, or Finance Act, 1994, are separate from CGST proceedings, and payment methods used under the old laws cannot be applied for payments under the CGST Act. The Revenue indicated that if the Court directed the payment to be considered proper, they would accept it and hear the appeals on merits.