T C Tours Limited vs. Union Territory Of J And K And Ors. (Finance Department)

Held

The Court held that the rejection of the petitioner's appeal solely on the ground of non-submission of a hard copy was unsustainable. The Court referred to Section 107(5) of the J&K GST Act, which mandates that appeals be filed in the prescribed form and manner. Rule 108(1) of the J&K GST Rules clearly states that appeals can be filed electronically or otherwise as notified by the Commissioner. Since the respondents failed to produce any notification requiring a hard copy filing in addition to electronic filing, the rejection on this technical ground was deemed unwarranted. The Court also noted that the requirement of submitting a certified copy of the impugned order has been removed by an amendment to Rule 108, particularly when the order itself is uploaded on the GST portal, as was the case here. The Court emphasized that substantial justice should not be sacrificed for mere technicalities and that procedural rules are meant to aid justice. Citing precedents like Otsuka Pharmaceuticals India Private Limited and Saraogi E-Ventures Private Limited, the Court found the rejection to be arbitrary and in violation of principles of natural justice, as no opportunity of hearing was provided. Therefore, the impugned order was set aside, and the matter was remanded back to the Appellate Authority for a fresh decision on merits after affording an opportunity of hearing.

Facts

The petitioner, TC Tours Limited, filed a writ petition challenging an order dated 06.03.2023 by respondent No. 3, which rejected their appeal (Form GST APL-02). The rejection was based on the ground that the petitioner had not submitted a hard copy of the appeal, as allegedly mandatory under Section 107 of the Jammu and Kashmir GST Act, 2017. The dispute originated from a show cause notice dated 14.12.2020 issued by respondent No. 4, proposing a demand of ₹8,57,286/- CGST and ₹8,56,546/- SGST for the period April 2019 to March 2020, due to alleged excess Input Tax Credit (ITC) availed in Form GSTR-3B compared to Form GSTR-2A. This demand was confirmed by an order dated 02.06.2021. The petitioner filed an online appeal on 27.08.2021, with a pre-deposit of ₹1,71,458/-, asserting that the ITC mismatch was due to ineligible ITC, reversals, and availment in a subsequent financial year, supported by invoices, returns, and reconciliation documents.

Key Issues

1. Whether the rejection of the petitioner's appeal by respondent No. 3, solely on the ground of non-submission of a hard copy, is legally sustainable, considering the provisions of Section 107 of the J&K GST Act and Rule 108 of the J&K GST Rules? Petitioner's contention: The petitioner argued that Section 107 read with Rule 108 of the J&K GST Rules permits electronic filing of appeals, and there is no mandatory requirement for submitting a hard copy. They further contended that the appeal was rejected without an opportunity of hearing, violating principles of natural justice. They also argued that the requirement of submitting a certified copy of the impugned order was removed by an amendment to Rule 108, especially when the order was uploaded on the GST portal. Revenue's contention: The respondents argued that Rule 108 of the CGST Rules mandates the submission of a hard copy along with a certified copy of the appeal. They asserted that the petitioner failed to submit both, and therefore, the Appellate Authority rightly rejected the appeal.