M/S Kothari Associates vs. State Of U.P. And 2 Others

Held

The Court noted that the petitioner approached the first Appellate Authority after a delay of eight months, claiming the penalty order was not reflected on the web portal. The department, however, categorically denied this, and the petitioner failed to provide a concrete response. The Court found that the petitioner had knowledge of the order, as evidenced by their own appeal memo and affidavit, which cited issues with online filing. The Court also referred to the Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019, which allows for the extension of time for filing appeals to the Appellate Tribunal when it is yet to be constituted. Relying on a coordinate bench's decision in M/s. Polo International, the Court granted the petitioner indulgence to invoke the remedy of filing an appeal before the Tribunal in terms of this Order. Therefore, the writ petition was dismissed as devoid of merit, but with a direction to allow the petitioner to approach the Tribunal as per the Removal of Difficulties Order.

Facts

The petitioner, M/s Kothari Associates, a registered dealer in plastic granules, is challenging an order dated 14.08.2018 passed under Section 129(3) of the U.P. GST Act, 2017, which imposed a tax of Rs. 3,52,800/- and a penalty of Rs. 3,52,800/-, totaling Rs. 7,05,600/-. The goods were intercepted on 11.08.2019 due to discrepancies in documents. The petitioner paid the entire amount on the same day and the goods were released. The petitioner filed an appeal before the Additional Commissioner, Grade-II, (Appeal)-I, Commercial Tax, Noida, on 16.07.2019, approximately eight months after the initial order, citing non-availability of the order on the web portal and lack of information from the driver. The Appellate Authority dismissed the appeal on 21.11.2019 on grounds of delay.

Key Issues

1. Whether the first Appellate Authority erred in not condoning the delay in filing the appeal, considering the petitioner's contention that the order was not reflected on the web portal and the driver was not informed, thus preventing timely filing? 2. Whether the imposition of tax and penalty under Section 129(3) of the U.P. GST Act, 2017, was arbitrary and illegal, given the alleged minor clerical mistake in the E-way Bill regarding the vehicle number? Petitioner's arguments: The first Appellate Authority should have condoned the delay as the order was not available online, and the petitioner was unaware of the offline filing mechanism. The rejection on technical grounds of delay is unjust, especially when the penalty was imposed for a minor clerical error in the E-way Bill. Reliance was placed on this Court's decisions in M/S Central Industrial Security Force Vs. Commissioner of Central Goods and Service Tax and M/S Jindal Pipes Limited Vs. State of U.P. Respondent's arguments: The E-way bill was valid for four days, but the distance between New Delhi and Gorakhpur could not be covered within this period. The vehicle number and other information were wrongly mentioned in the tax invoice. The demand order was uploaded on the portal and provided to the driver. The petitioner's own appeal memo and affidavit indicate knowledge of the order and the delay was due to online filing issues. The Appellate Authority has no power to extend the period of limitation beyond statutory limits, citing Apex Court decisions in Singh Enterprises Vs. Commissioner of Central Excise and Commissioner of Custom and Central Excise Noida Vs. M/s. Punjab Fibres Limited.