M/S Dynasoure Concrete Treatment PVT. LTD. vs. State Of Chhattisgarh
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The petitioner, M/s Dynasoure Concrete Treatment Pvt. Ltd., is challenging an order dated 06.02.2023 passed by the Joint Commissioner (Appeals) and a consequent demand notice dated 16.02.2023. These orders dismissed the petitioner's appeal against an order dated 03.01.2022 passed by the Assistant Commissioner. The dispute arose from a difference between the Input Tax Credit (ITC) claimed by the petitioner in GSTR-3B and the ITC available in GSTR-2A for the financial year 2018-19, amounting to Rs. 10.43 lakhs. The petitioner is a registered company engaged in works contract and service provision, operating in multiple states. The petitioner contends that the tax on the purchases in question was already paid by the supplier. The petitioner filed an appeal before the Joint Commissioner (Appeals), which was dismissed, leading to the present writ petition.
Held
The Court held that the petitioner should be permitted to file an appeal before the GST Appellate Tribunal as and when the President or State President enters office. This decision is based on the principle that a taxpayer should not be deprived of a statutory remedy due to the non-constitution of the appellate tribunal by the authorities. The Court directed that the statutory stay provided under Section 112(9) of the CGST Act, 2017, would remain in operation until the decision of such appeal, subject to the petitioner depositing 20% of the disputed amount. If the appeal is not filed within the prescribed period after the Tribunal becomes functional, the State would be at liberty to proceed with recovery. The Court also clarified that this order would not provide relief if the required deposit for filing the appeal is not made. The ratio decidendi is that the non-constitution of a statutory appellate forum cannot prejudice the right of a litigant to pursue their statutory remedy, and interim relief can be granted subject to compliance with pre-conditions like deposit of a portion of the disputed tax.
Key Issues
1. Whether the petitioner is entitled to file an appeal before the GST Appellate Tribunal, given the current non-constitution of the Tribunal and the requirement to deposit 20% of the disputed tax amount under Section 112(9) of the CGST Act, 2017? Petitioner's arguments: The petitioner relies on the judgment of this Court in M/s Divya Steels Vs. State of Chhattisgarh and others (WPT No. 40 of 2023) and similar High Court judgments (Patna High Court in M/s Cohesive Infrastructure Developers Pvt. Ltd. and Bombay High Court in Rochem India Pvt. Ltd.) which permitted petitioners to file appeals upon the constitution of the Tribunal. The petitioner argues that they should not be deprived of their statutory remedy due to the respondents' failure to constitute the Tribunal. Revenue's arguments: The judgment records no specific arguments from the State/Revenue regarding the petitioner's entitlement to file an appeal or the interpretation of Section 112(9).
Sections Cited
Section 107, Section 112(9), Section 37, Section 39
AI-generated summary — verify with the full judgment below
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2024:CGHC:42057 NAFR HIGH COURT OF CHHATTISGARH, BILASPUR WPT No. 123 of 2024 M/s Dynasoure Concrete Treatment Pvt. Ltd. (A Private Limited Company) Having Its Corporate Office At 143 Anand Nagar, Opposite Telibanda Talab, Raipur C.G. Through Its Managing Director Namely Rajesh Pandey Son Of Deonarain Sharma, Aged Around 57 Years, Resident Of 5204 Icc 2 Island City Centre, G D Ambedkar Road, Near Naigaon Mono Rail Station, Dadar East, Mumbai (Maharashtra) Pin- 4000014
... Petitioner versus 1 - State Of Chhattisgarh Through The Secretary, Department Of State Tax (G S T), North Block, Sector-19, Atal Nagar, Naya Raipur, Raipur, Commercial Tax, Raipur, C.G. 2 - Joint Commissioner (Appeals) Of Chhattisgarh State Tax (G S T) North Block, Sector-19, Atal Nagar, Naya Raipur, Raipur, Commercial Tax, Raipur, C.G. 3 - The Assistant Commissioner Chhattisgarh State Tax, Raipur-7, Division-2, Raipur, C.G. ... Respondents For Petitioner : Mr. Prashant Dansena, Advocate For State : Mr. Ajay Kumrani, Panel Lawyer Hon'ble Shri Justice Arvind Kumar Verma Order on board (24.10.2024)
By the present petition, the petitioner is challenging the impugned order dated 06.02.2023 in Appeal Case No. 257/GST/2022 and the consequent summary of demand in Form GST APL-04 dated 16.02.2023 passed by respondent no. 2 i.e. Appellate Authority under Section 107 of the CGST Act, 2017, thereby dismissing the appeal filed by the petitioner against the order dated 03.01.2022 passed by Respondent no. 3. 2
The petitioner by way of this petition has prayed for the following reliefs:- a. A writ and/or order in the nature of appropriate writ calling the entire records of the case pertaining to the case of the petitioner. b. A writ and/or an order in the nature of appropriate writ do issue setting aside the impugned the order dated 06.02.2023 and the consequent summary of demand in Form GST APL-04 dated 16.02.2023 (Annexure P-1) and all actions/orders related & consequential thereto, in the facts and circumstances of the case. c. Cost of the proceedings. d. Any other relief in the discretion of this Court.
The facts of the case leading to final adjudication of this petition are that the petitioner is a private limited company and is engaged in business of Works Contract and service provider thereof for past many years in the State of Chhattisgarh and other States, and is represented by its Managing Director. The aforesaid business of the petitioner is duly registered under the provisions of the Central Goods and Services Tax Act, 2017 vide registration (GSTIN) bearing no. 22AABCD8433CIZ7. It is also pertinent to mention that since the business of the petitioner is being carried in various states viz. Maharashtra, Chhattisgarh, it has also obtained GST Numbers of the respective States. That, the petitioner being a law abiding taxpayer has regularly filed its periodic returns as prescribed under Section 37 and Section 39 of the CGST Act, 2017 and have filed the returns which commensurate with the data available in the books of accounts. That in the relevant tax period April
3 2018 March 2019 the petitioner has entered into purchase transaction with one firm Sika India Private Limited for Chhattisgarh State and the Invoices were issued in their Chhattisgarh GSTIN only. The tax on the said purchase had been already paid by the supplier to the Govt. Exchequer through GSTR-3B and further GSTR-1 has also been furnished by the said parties. Learned Adjudicating Authority vide Form GST DRC -01A dated 23.01.2021 issued intimation of tax amounting to Rs. 10.43 lakhs being payable by the petitioner on the ground that there is a difference between the ITC claimed by the petitioner in GSTR 3B and ITC available in GSTR 2A for the FY 2018 – 19. Upon service of said demand, immediately the petitioner being aggrieved by the order filed appeal before the Joint Commissioner (Appeal) State Tax. The appeal preferred by the petitioner has been dismissed by the impugned order dated 06.02.2023. The remedy available against the impugned order is before the Ld. GST Tribunal under Section 112(9) of the CGST Act, 2017. 4. Learned counsel for the petitioner submits that in order to file an appeal before the appellate tribunal, 20% tax is required to be deposited as per the provisions of Section 112(9) of the Act of 2017. He also relied upon the judgment passed by this Court in the matter of M/s Divya
Similar issues had arisen before the various Hon’ble High Courts which have been disposed of with certain directions to file an appeal as and when the appointment of president takes place such as in the judgment of Hon’ble Patna High Court passed in Civil Writ Juri iction Case no. 15438 of 2023, M/s Cohesive Infrastructure Developers order passed by the Hon’ble Bombay High Court in Writ Petition
In the light of of the facts and circumstances and judgments of Hon’ble Patna and Bombay High Courts these petitions were disposed of permitting the petitioners to file an appeal as and when the president or the State President as the case may be enters office of the appellate Tribunal constituted under Section 107 of the Act of 2017. This preposition has not been disputed by any of the parties appearing in the writ petitions. The hon’ble Patna High court in case of M/s Cohesive Infrastructure Developers Pvt Ltd. Disposed of the identical cases giving the following directions:- (I) Subject to deposit of a sum equal to 20 percent of the remaining amount of tax in dispute, if not already deposited, in addition to the amount deposited earlier under Sub- Section (6) of Section 107 of the B.G.S.T. Act,
5 the petitioner must be extended the statutory benefit of stay under Sub-Section (9) of Section 112 of the B.G.S.T. Act. The petitioner cannot be deprived of the benefit, due to non- constitution of the Tribunal by the respondents themselves. The recovery of balance amount, and any steps that may have been taken in this regard will thus be deemed to be stayed. It is not in dispute that similar reliefhas been granted by this Court in the case of SAJ Food Products Pvt. Ltd. Vs. The State of Bihar & Others in C.W.J. C No. 15465 of 2022. (ii) The statutory relief of stay, on deposit of the statutory amount, however in the opinion of this Court, cannot be open ended. For balancing the equities, therefore, the Court is of the opinion that since order is being passed due to non-constitution of the Tribunal by the respondent- Authorities, the petitioner would be required to present/file his appeal under Section 112 of the B.G.S.T. Act, once the Tribunal is constituted and made functional and the President or the State President may enter office. The appeal would be required to be filed observing the statutory requirements after coming into existence of the Tribunal, for facilitating consideration of the appeal. (iii) In case the petitioner chooses not to avail the remedy of appeal by filing any appeal under Section 112 of the B.G.S.T. Act before the Patna High Court CWJC No. 15438 of 2023 dt. 30.10.2023 Tribunal within the period which may be specified upon constitution of the 6 Tribunal the respondent- Authorities would be at liberty to proceed further in the matter, in accordance with law. (iv) If the above order is complied with and a sum equivalent to 20 per cent of the remaining amount of the tax in dispute is paid them, if there is any attachment of the bank account of the petitioner pursuant to the demand, the same shall be released.
In the light of the above, the present writ petition is disposed of with a direction that as soon as the president or State President enters office of the Goods and Service Tax Appellate Tribunal constituted under the Act of 2017, the petitioner would file an appeal that may be decided in accordance with law on its own merits. The statutory stay as provided under section 112(9) of Act of 2017 would remain in operation till the decision of such appeal, subject to deposition of 20% of the disputed amount be paid by the petitioner. If the appeal is not filed within the prescribed period of limitation, the state would be at liberty to proceed against the petitioner for recovery of remaining taxes, interest and penalty if any.
With these observation, writ petition disposed of.
It is also made clear that if the amount required to file an appeal has not been deposited by any of the petitioner herein, this order would not come to his rescue. S
(Arvind Kumar Verma)
Judge Alfiza
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Reproduced from the public record of the Chhattisgarh High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.