M/S. Olectra Greentech Limited vs. Deputy Commissioner (St)

Facts

The petitioner, M/s. Olectra Greentech Limited, filed a writ petition before the Telangana High Court challenging an order dated 03.11.2023 passed by the Appellate Joint Commissioner of State Tax (2nd Respondent) which confirmed an order dated 31.05.2022 by the Deputy Commissioner (ST) (1st Respondent). These orders pertained to the tax period April 2018 to September 2018 and confirmed proceedings in DRC-07. The petitioner sought to set aside these orders as illegal, arbitrary, and without jurisdiction, and to restore an earlier order dated 08.01.2019 by the 1st Respondent sanctioning a refund of Rs. 4,42,00,000/-. The primary ground for challenge was the non-constitution of the GST Appellate Tribunal as envisaged under Section 109 of the CGST Act, 2017.

Held

The Court held that in the absence of the GST Appellate Tribunal being functional, it is compelled to entertain writ petitions challenging orders passed by GST Appellate Authorities. The Court noted that the undertaking given by the Chairman of the Central Board of Indirect Taxes and Customs regarding no coercive steps pending the Tribunal's constitution still holds good. Consequently, the Court decided to dispose of the writ petition by permitting the petitioner to approach the Tribunal within three months of its establishment. As an interim measure, to strike a balance, the petitioner was directed to pay 20% of the tax liability as assessed by the Assessing Officer within four weeks. The authorities were restrained from taking coercive steps for the enforcement of the orders until the disposal of the appeal before the Tribunal. The Court also allowed the petitioner to adjust the excess amount of 10% already deposited at the time of filing the first appeal towards the 20% interim deposit. The payment was to be made via Form GST DRC-03, clearly mentioning it as a part deposit against the challenge to the order-in-appeal and the intention to approach the Tribunal.

Key Issues

1. Whether the writ petition is maintainable before the High Court in the absence of the constitution of the GST Appellate Tribunal, as per Section 109 of the CGST Act, 2017? 2. What interim directions, if any, should be issued pending the constitution of the Tribunal? Petitioner's Arguments: The petitioner argued that the writ petition is maintainable due to the non-constitution of the GST Appellate Tribunal. They relied on an undertaking given by the Chairman of the Central Board of Indirect Taxes and Customs in a similar case before the Bombay High Court, stating no coercive steps would be taken against assessees pending the Tribunal's establishment. The petitioner also sought to restore a prior refund order. Revenue's Arguments: The judgment does not explicitly record arguments made by the Revenue. However, the Special Government Pleader for State Tax was present and heard. The Court acknowledged the Department's acceptance of the fact that the Tribunal has not been constituted.