M/S Shri Sshantanu Steel Traders vs. State Of Chhattisgarh

Facts

The appellants, M/s Shri Sshantanu Steel Traders, were assessed a tax liability of Rs. 1,14,80,992/- by the Assistant Commissioner, State Taxes, Durg, for the period June 2018 to January 2019. The appellants filed an appeal before the Appellate Authority under Section 107 of the CGST Act, 2017. The Appellate Authority rejected the appeal on three grounds: it was not submitted online, 10% of the disputed amount was not deposited at the time of filing, and despite opportunities, the deposit was not made. The appellants then filed a writ petition before the High Court, challenging the rejection. The learned Single Judge disposed of the writ petition, observing that the 10% deposit was mandatory and that the appeal was premature without it, but granted liberty to the appellants to move an application before the appellate authority for seeking permission to deposit the 10% amount. The present writ appeal is against this order of the learned Single Judge.

Held

The Court held that the deposit of 10% of the disputed amount is a mandatory pre-condition for filing an appeal under Section 107(6)(b) of the CGST Act, 2017. The argument advanced by the appellants regarding the correctness of the tax liability cannot be considered unless this statutory requirement is met. The Court found no reason to interfere with the order of the learned Single Judge, who had granted liberty to the appellants to move an appropriate application before the appellate authority seeking permission to deposit the 10% amount. The Court reiterated that unless the deposit is made, the appeal is considered 'stillborn'. Therefore, the appeal was dismissed as lacking merit.

Key Issues

1. Whether the appellants are liable to deposit 10% of the remaining tax in dispute as a pre-condition for filing an appeal under Section 107(6)(b) of the CGST Act, 2017, when they contend that the tax liability was wrongly fastened upon them and arose from the seller. Arguments: Petitioner/Appellant: The appellants argued that they are not obligated to deposit 10% of the disputed amount under Section 107(6)(b) of the CGST Act, 2017, because the tax liability was wrongly imposed upon them, and the actual liability arose from the seller. Therefore, the condition of depositing 10% of the disputed amount should not apply. Respondents/State: The respondents relied on Section 107(6)(b) of the CGST Act, 2017, which mandates the deposit of 10% of the remaining tax in dispute for filing an appeal. They also pointed to the observations of the learned Single Judge who found no infirmity in the rejection of the appeal due to non-compliance with this provision.