M/S Mahamaya Medical And General Store vs. State Of Chhattisgarh

Held

The Court held that the petitioner could not be deprived of their statutory remedy of appeal due to the non-constitution of the Goods and Service Tax Appellate Tribunal by the respondents. Following the directions issued by the Patna High Court in similar cases, the Court directed the petitioner to deposit 20% of the liability imposed upon them in the impugned order dated July 12, 2022. The petitioner was also directed to file their appeal before the Appellate Tribunal within 30 days from the date of the order. The statutory stay as provided under Section 112(9) of the Act would remain in operation until the decision of such an appeal. The Court reasoned that this approach balances the equities and allows the petitioner to pursue their statutory remedy once the Tribunal becomes functional. If the appeal is not filed within the prescribed period, the State would be at liberty to proceed with recovery. The Court expressly left undecided any substantive issues regarding the merits of the petitioner's claim for Input Tax Credit, as the primary focus was on procedural recourse due to the Tribunal's non-constitution.

Facts

The petitioner, M/s Mahamaya Medical and General Store, challenged an order dated July 12, 2022, passed by the Joint Commissioner (Appeals) (SGST) State Tax, Bilaspur. This order partly allowed the petitioner's first appeal against a demand order dated January 15, 2021, issued by the Assistant Commissioner State Tax, Korba. The original demand order imposed tax, interest, and penalty for the period April 2018 to March 2019. The petitioner sought to set aside the appellate order and allow their claim for Input Tax Credit. The reason for filing a writ petition before the High Court, instead of a second appeal to the GST Appellate Tribunal, was that although the Tribunal was notified in Chhattisgarh, its president and members had not yet been appointed, rendering the statutory remedy unavailable.

Key Issues

1. Whether the petitioner can maintain a writ petition before the High Court due to the non-constitution of the Goods and Service Tax Appellate Tribunal, thereby preventing them from filing a second appeal under Section 112 of the Chhattisgarh Goods and Service Tax Act, 2017? 2. Whether the petitioner is entitled to the statutory benefit of stay under Section 112(9) of the Act, pending the constitution and functionalization of the Appellate Tribunal, upon fulfilling certain conditions? Petitioner's arguments: The petitioner contended that similar issues have been addressed by other High Courts, which have directed parties to file appeals and await the appointment of the Tribunal's president. They relied on judgments from the Patna High Court in M/s Cohesive Infrastructure Developers Pvt. Ltd. Vs. The Central Board of Indirect Taxes and others and the Bombay High Court in Rochem India Pvt. Ltd. Vs. The Union of India and others. The petitioner also highlighted a State Government notification dated December 5, 2019, which extended the period of limitation in light of the Tribunal's non-constitution. Revenue/State's arguments: The State/Respondents did not dispute the petitioner's proposition regarding the disposal of the petition in light of the aforementioned facts and judgments.