M/S Sharda Sales vs. Assistant Commissioner, State Tax

Facts

The petitioner, M/s Sharda Sales, through its proprietor, filed a writ petition before the Rajasthan High Court challenging two impugned orders dated 24.08.2021 and 02.11.2022. A significant grievance raised by the petitioner was that the Goods and Services Tax Tribunal (GST Tribunal) had not become functional since the implementation of GST in 2017. The petitioner's counsel relied on a previous order of the High Court dated 15.02.2024, which had disposed of a similar writ petition. In that prior case, the respondents had acknowledged the non-constitution of the Tribunal and proposed a procedure under Section 112(8) of the Rajasthan Goods and Services Tax Act, 2017, allowing the petitioner to file an appeal within a stipulated period from the Tribunal's constitution, with liberty to approach the court again if needed.

Held

The Court held that the petitioner has a remedy of appeal, and in light of the GST Tribunal not being functional, the writ petition was disposed of by relegating the petitioner to the remedy of appeal. The Court directed the petitioner to comply with the pre-deposit requirements for filing an appeal within six weeks from the date of the order. Furthermore, the Court clarified that if the petitioner files an appeal within three months of the Tribunal's constitution, it shall be considered to have been filed within the limitation period. The petitioner was also granted liberty to make a request for early disposal of the appeal, which would be considered in accordance with the law. The reasoning was based on the precedent set by a previous order of the same High Court, which allowed for such a procedure when the appellate tribunal was not operational, and the consent of the parties to this arrangement.

Key Issues

1. Whether the petitioner can avail the statutory remedy of appeal when the Goods and Services Tax Tribunal is not functional, and if so, what protection is available under Section 112(8) of the Rajasthan Goods and Services Tax Act, 2017? Petitioner's Contention: The petitioner argued that due to the non-functional status of the GST Tribunal, they were unable to pursue their statutory remedy of appeal. They relied on a previous High Court order (D.B. Civil Writ Petition No.1113/2024) which provided a mechanism for petitioners to file appeals within a stipulated period from the Tribunal's constitution, subject to compliance with pre-deposit requirements under Section 112(8) of the Act, and a circular dated 23.03.2020 issued by the Government of Rajasthan Finance Department (Tax Division). Respondents' Contention: The respondents acknowledged that the Tribunal was not constituted and the process was ongoing. They agreed to the disposal of the petition on the condition that the petitioner makes the payment as per Section 112(8) of the Act, and that further proceedings for recovery of the balance amount would not be drawn, provided the petitioner avails the statutory remedy of appeal within three months from the date of the Tribunal's constitution.