M/S Pushpak Electronics vs. State Of Chhattisgarh

Facts

The petitioners, M/s Divya Steels, M/s Ganpati Developers, M/s Baba Hardasram Agency, M/s Shree Balaji Enterprises, M/s Pushpak Electronics, and Sarda Energy And Minerals Limited, filed writ petitions challenging orders passed by the Joint Commissioner (Appellate) State Tax, Raipur, Chhattisgarh. These orders dismissed their statutory first appeals filed under Section 107(1) of the GST Act. The petitioners had previously faced orders from the Assistant Commissioner, State Tax, imposing tax, interest, and penalty for various periods. The primary reason for filing writ petitions instead of a second appeal before the GST Appellate Tribunal was the non-appointment of the President and members to the Tribunal in Chhattisgarh, despite its notification. The petitioners had deposited 20% of the disputed tax amount as required for filing an appeal before the Tribunal.

Held

The Court held that the writ petitions are maintainable due to the non-constitution and non-functional status of the Goods and Services Tax Appellate Tribunal in Chhattisgarh. The Court reasoned that the petitioners cannot be deprived of their statutory right to appeal solely because the Tribunal has not been constituted and made functional by the respondents. Following the precedents set by the Patna High Court in M/s Cohesive Infrastructure Developers Pvt. Ltd. and the Bombay High Court in Rochem India Pvt. Ltd., the Court directed that as soon as the President or State President enters office of the GST Appellate Tribunal, the petitioners shall file their appeals. The statutory stay provided under Section 112(9) of the Act of 2017 would remain in operation until the disposal of these appeals. The Court also stipulated that if the appeals are not filed within the prescribed period of limitation after the Tribunal becomes functional, the State would be at liberty to proceed with the recovery of remaining taxes, interest, and penalty. It was further clarified that this order would not provide any relief if the required amount for filing an appeal had not been deposited by the petitioners.

Key Issues

1. Whether the petitioners are entitled to file a writ petition before the High Court due to the non-constitution and non-functional status of the Goods and Services Tax Appellate Tribunal in Chhattisgarh, thereby preventing them from filing a second appeal as provided under Section 112 of the CGST Act, 2017? Petitioner's Argument: The petitioners argued that the non-appointment of the President and members to the GST Appellate Tribunal in Chhattisgarh renders the statutory remedy of a second appeal unavailable. They contended that they have already deposited 20% of the disputed tax amount, as required by Section 112(8) of the Act, and that the State Government's notification extending the period of limitation in such circumstances should be applied. They relied on judgments from the Patna High Court (M/s Cohesive Infrastructure Developers Pvt. Ltd. vs. The Central Board of Indirect Taxes and others) and the Bombay High Court (Rochem India Pvt. Ltd. Vs. The Union of India and others) which granted similar reliefs. Revenue's Argument: The respondents did not dispute the petitioners' contention regarding the deposit of 20% of the tax amount. They also did not dispute the factual situation that the Tribunal was not functional. Their silence on the core legal issue implies an acceptance of the petitioners' premise that the writ petitions are maintainable in the absence of a functional Tribunal.