M/S Eff-Tech Infraengineers vs. State Of Chhattisgarh

Held

The Court held that the petitioner cannot be deprived of the statutory benefit of appeal due to the non-constitution of the Appellate Tribunal. Following the principles laid down in judgments from the Patna and Bombay High Courts, and this Court's own decision in M/s Divya Steels, the Court directed that the petitioner be permitted to file an appeal as and when the President or State President enters office of the Goods and Service Tax Appellate Tribunal. This permission is subject to the petitioner depositing 20% of the disputed amount within 30 days from the receipt of this Court's order. The statutory stay under Section 112(9) of the CGST Act, 2017, would remain in operation until the appeal is decided on its merits. The Court clarified that if the appeal is not filed within the prescribed limitation period after the Tribunal is constituted, the State would be at liberty to proceed with recovery. It was also made clear that this order would not provide relief if the required deposit is not made.

Facts

The petitioner, M/s Eff-Tech Infraengineers, a partnership firm, challenged an order dated 25.09.2023 passed by the Joint Commissioner (Appeals) and a consequent demand summary dated 11.10.2023. These orders dismissed the petitioner's appeal against an order dated 17.08.2021 passed by the Assistant Commissioner. The Assistant Commissioner had imposed a tax demand of Rs. 4,59,600/- along with interest and penalty for claiming excess Input Tax Credit during the tax period April 2019 – March 2020. The petitioner contended that tax on the purchase transactions had already been paid by the suppliers and their GSTR-3B and GSTR-1 were furnished. The petitioner sought setting aside of the appellate order and the demand.

Key Issues

1. Whether the petitioner is entitled to file an appeal before the appellate tribunal, considering the provisions of Section 112(9) of the CGST Act, 2017, which requires deposit of 20% of the disputed tax amount, in the absence of a constituted appellate tribunal? Petitioner's contention: The petitioner argued that they are required to deposit 20% of the tax as per Section 112(9) of the CGST Act, 2017, to file an appeal before the appellate tribunal. They relied on this Court's judgment in M/s Divya Steels Vs. State of Chhattisgarh and others (WPT No. 40 of 2023) and judgments from the Patna High Court (M/s Cohesive Infrastructure Developers Pvt. Ltd. Vs. The Central Board of Indirect Taxes) and Bombay High Court (Rochem India Pvt. Ltd. Vs. The Union of India) which permitted filing appeals upon constitution of the tribunal. Revenue's contention: The learned counsel for the State supported the submission made by the learned counsel for the petitioner, indicating no dispute with the petitioner's stance on the procedural issue.