Shaikh Sons And Co And Anr vs. Union Of INDIA And Ors.
Original PDF →Facts
The appellants, Shaikh Sons & Co and another, filed an intra-court appeal against an order dated 1st October, 2024, passed by a Single Bench. The appellants were not aggrieved by the direction to attach their bank account via Form GST DRC-13 dated 24th July, 2024. However, they challenged the direction in paragraph 6 of the impugned order, which mandated a pre-deposit of Rs. 3,00,000/-. The appellants contended that this amount exceeded the statutory requirement of 10% of the disputed tax for preferring an appeal. The revenue authorities were respondents in the original writ petition and the appeal.
Held
The Court held that while statutes prescribe a particular percentage for pre-deposit, which courts normally adhere to, exceptional circumstances may allow for judicial discretion to direct payment of a portion of the disputed tax. However, the Court found that the instant case did not fall under any such exceptional circumstances. Consequently, the Court disposed of the appeal by modifying the direction issued in paragraph 7 of the impugned order. The appellants were directed to make a pre-deposit of 10% of the disputed tax, instead of Rs. 3 lakhs, within 10 working days. Upon this pre-deposit, the order of attachment of the bank account would stand revoked, and the appellants would be entitled to operate their bank account. The appellate authority was directed to dispose of the appeal on merits within eight weeks of the conclusion of the personal hearing. The Court also stipulated that failure to comply with this order would result in the automatic dismissal of the appeal.
Key Issues
1. Whether the High Court can exercise its discretion to modify the pre-deposit amount mandated by statute for preferring an appeal under the Goods and Services Tax (GST) regime? This issue turns on the interpretation of statutory provisions governing appeals and the scope of judicial discretion in such matters. Contentions: Appellants: Argued that the pre-deposit amount of Rs. 3,00,000/- directed by the Single Bench was excessive and contrary to the statutory requirement of 10% of the disputed tax. They sought modification of this direction. Revenue/State: The judgment does not record specific arguments from the revenue or state regarding the pre-deposit amount. It notes the general principle that courts will not alter the statutory pre-deposit amount except in exceptional cases, implying the revenue likely relied on this principle.
Sections Cited
GST DRC – 13
AI-generated summary — verify with the full judgment below
2024 Item No.12 gd/s MAT/1983/2024 SHAIKH SONS & CO AND ANR. VS UNION OF INDIA AND ORS. IA NO: CAN/1/2024
Mr. Himangshu Kumar Ray, Mr. Sushant Bagaria, Ms. Shiwani Shaw, Mr. Subhasis Podder, Mr. Amit Saha ..for the Appellants.
Md. T.M. Siddiqui, Mr. T. Chakraborty ..for State.
Mr. Kausik Dey, Mr. Kaustuv K. Maiti ..for the Respondent Nos.7 and 8. 1. This intra court appeal by the writ petitioners is directed against the order dated 1st October, 2024 in WPA 21478 of 2024. 2. Mr. Himangshu Kumar Ray, learned advocate for the appellants would submit that the appellants are not aggrieved by the direction issued in paragraph 8 of the impugned order by which the learned Single Bench directed the order of attachment issued in Form GST DRC – 13 dated 24th July, 2024, but is only aggrieved by the direction issued in paragraph 6 directing the appellant/writ petitioners to make pre-deposit of Rs.3,00,000/- which is over and
2 above 10% of the disputed tax which is statutorily required to be pre-deposit for preferring an appeal.
Since the statute prescribes a particular percentage, the same has to be adhered to by the assessee and at the normal circumstances the court will not alter the amount to be deposited but, however, in certain exceptional cases the court may exercise discretion and direct payment of a portion of the disputed tax. However, the instant case does not fall under any such exception.
Therefore, we dispose of this appeal by slightly modifying the direction issued in paragraph 7 of the impugned order by directing the appellant/writ petitioners to make pre-deposit of 10% of the disputed tax instead of Rs.3 lakhs within a period of 10 working days from the date of receipt of the server copy of this order and file an appeal electronically with the appellate authority. The appellate authority shall dispose of the appeal after affording an opportunity of personal hearing of the authorized representatives of the appellant within a reasonable period preferably within eight weeks from the date on which the personal hearing is concluded on merits and in accordance with law.
Upon the pre-deposit of 10% of the disputed tax in terms of the above order being made, the order of attachment issued in Form GST DRC – 13
3 dated 24th July, 2024 shall stand revoked and the appellant/writ petitioners shall be entitled to operate his bank account. In the event the appellant fails to comply with this order, the benefit of the order will not enure to the appellant and the appeal would automatically be dismissed without reference to this court.
(T. S. SIVAGNANAM)
CHIEF JUSTICE
(HIRANMAY BHATTACHARYYA, J.)
Reproduced from the public record of the Calcutta High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.