Jaiswal Medical Stores vs. Joint Commissioner (Appeal) State Tax Bilaspur

Facts

The petitioner, Jaiswal Medical Stores, challenged an order dated October 17, 2022, passed by the Joint Commissioner (Appeal), State Tax, Bilaspur. This order partly allowed the petitioner's appeal against a demand order dated September 28, 2021, issued by the Assistant Commissioner, State Tax (GST), Korba. The demand order imposed tax, interest, and penalty for the period April 1, 2019, to March 31, 2020. The First Appellate Authority reduced the disputed amount by Rs. 2,24,324 but affirmed the remaining demand. The petitioner filed a writ petition before the High Court because the Goods and Service Tax Appellate Tribunal, though notified in Chhattisgarh, had not yet been constituted with a president or members. The petitioner had already deposited 20% of the statutory amount as per a prior court order.

Held

The Court held that the petitioner cannot be deprived of the statutory benefit of stay under Section 112(9) of the Chhattisgarh Goods and Service Tax Act, 2017, due to the respondents' failure to constitute the Goods and Service Tax Appellate Tribunal. Relying on judgments from the Patna and Bombay High Courts, the Court directed that the petitioner shall deposit 20% of the claimed amount in the demand notice and file an appeal before the Appellate Tribunal within 30 days from the date of the order. The statutory stay under Section 112(9) will remain in operation until the appeal is decided on its merits. If the petitioner has already deposited 20%, it will be adjusted upon verification. The Court also noted that if the appeal is not filed within the prescribed period, the State would be at liberty to proceed with recovery. The Court expressly left undecided the merits of the original demand.

Key Issues

1. Whether the petitioner can be deprived of the statutory benefit of stay under Section 112(9) of the Chhattisgarh Goods and Service Tax Act, 2017, due to the non-constitution of the Goods and Service Tax Appellate Tribunal? (Question of law) Petitioner's arguments: The petitioner contended that similar issues have been addressed by other High Courts, such as the Patna High Court in M/s Cohesive Infrastructure Developers Pvt. Ltd. vs. The Central Board of Indirect Taxes and others and the Bombay High Court in Rochem India Pvt. Ltd. vs. The Union of India and others. They argued that the State Government's notification dated December 5, 2019, extended the period of limitation until the constitution of the Appellate Tribunal. Therefore, the petitioner should be permitted to file an appeal and have it heard once the Tribunal is functional. Revenue's arguments: The judgment records that the petitioner's proposition was not disputed by the other party (the respondents).