M/S Yash Resources Recycling Limited vs. The Deputy Commissioner (St) - Ii

Held

The Court held that the point raised by the petitioner regarding the adjustment of the pre-deposit amount was ponderable and had a significant financial impact. The Court noted that the appellate order was silent on this specific contention, which was reproduced in the order but not dealt with. The Court emphasized that reasons are the heartbeat of conclusions and that in the absence of binding reasons, the appellate authority's conclusion cannot sustain judicial scrutiny. It was a minimum expectation for the appellate authority to deal with the point raised by the petitioner by assigning justifiable reasons, especially when the point was reproduced. Consequently, the appellate order dated 02.08.2024 was set aside. The matter was remitted back to the learned appellate authority to decide the appeal afresh in accordance with the law. The petitioner agreed to appear before the appellate authority on 02.12.2024 without separate notice. The Court made it clear that it had not expressed any opinion on the merits of the case.

Facts

The petitioner, M/s Yash Resources Recycling Limited, filed a writ petition challenging an order passed by the Deputy Commissioner (ST) under Section 74 of the GST Act, 2017, for the tax period 2018-19. The petitioner had deposited Rs. 4,73,36,680/- during a search. The tax liability determined by the authority, including interest and penalty, amounted to Rs. 16,98,94,028/-. The petitioner's appeal before the Appellate Joint Commissioner (ST) was not admitted, and the appellate order dated 02.08.2024 confirmed the initial order. The petitioner contended that the pre-deposit amount should have been adjusted against the determined tax liability. The appellate authority, while reproducing this ground, allegedly failed to provide any reasoning for not adjusting the amount.

Key Issues

1. Whether the Appellate Joint Commissioner (ST) erred in law by failing to consider and provide reasons for not adjusting the pre-deposit amount of Rs. 4,73,36,680/- made by the petitioner against the determined tax liability, interest, and penalty, as required under Section 73(5) of the Central Goods and Services Tax Act, 2017 (by analogy)? Petitioner's Arguments: - The petitioner argued that the pre-deposit amount of Rs. 4,73,36,680/- should have been adjusted against the total demand of Rs. 16,98,94,028/-. - They contended that the appellate authority reproduced their specific ground regarding this adjustment but failed to assign any reasons for not allowing it. - Reliance was placed on Section 73(5) of the CGST Act, 2017, by analogy, and on the Supreme Court judgment in "WF (INDIA) LTD. v. State of Maharashtra" and the Bombay High Court judgment in "Vinod Metal v. State of Maharashtra". Respondents' Arguments: - The Special Government Pleader for State Tax supported the impugned order. - However, when specifically queried, the counsel could not point to any finding in the appellate order demonstrating application of mind to the petitioner's contention regarding the adjustment of the pre-deposit amount.