M/S. Sriyen Industries vs. Commissioner Of Customs And Central Tax Appeals

Facts

The petitioner, M/s. Sriyen Industries, filed a writ petition before the Telangana High Court challenging an Order-in-Appeal dated September 20, 2023, which stemmed from an Order-in-Original dated February 27, 2023, and a Show Cause Notice dated February 14, 2023. The primary ground for the challenge was the non-constitution of the Goods and Services Tax Appellate Tribunal (GSTAT) as envisaged under Section 109 of the Central Goods and Services Tax Act, 2017. The petitioner sought a declaration that the impugned order was perverse, illegal, and arbitrary, and also sought interim relief to restrain coercive actions. The Court noted that the Bombay High Court had previously dealt with similar challenges, and an undertaking was given by the Chairman of the Central Board of Indirect Taxes and Customs not to take coercive steps pending the constitution of the Tribunal.

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 referred to a previous decision of the Bombay High Court and the undertaking given by the Chairman of the Central Board of Indirect Taxes and Customs that no coercive steps would be taken against assessees pending the constitution of the Tribunal. Consequently, the Court found it appropriate to dispose of the writ petition, permitting the petitioner to approach the Tribunal within three months from its establishment. Regarding interim relief, the Court directed the petitioner to pay 20% of the tax liability as assessed by the Assessing Officer, in terms of Section 112 of the Act, within four weeks. Upon such payment, the authorities were restrained from taking coercive steps for the enforcement of the order of the Assessing Officer and the Appellate Authority until the disposal of the appeal. 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.

Key Issues

1. Whether the challenge to the order passed by the appellate authority under the GST law is maintainable before the High Court by way of a writ petition, given the non-constitution of the GST Appellate Tribunal as mandated by Section 109 of the Central Goods and Services Tax Act, 2017? The petitioner argued that due to the absence of the GST Appellate Tribunal, the High Court is compelled to entertain writ petitions challenging orders of GST appellate authorities. The petitioner relied on the undertaking given by the Chairman of the Central Board of Indirect Taxes and Customs regarding no coercive steps pending the Tribunal's constitution. The revenue, represented by the Standing Counsel, accepted the fact that the Tribunal has not been constituted and acknowledged the undertaking given by the Chairman of the Central Board of Indirect Taxes and Customs.