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

Held

The Court held that the order passed by the Joint Commissioner, State Taxes, Durg, rejecting the petitioner's appeal was not infirm. The reasoning was based on the clear mandate of Section 107(6)(b) of the Central Goods and Services Tax Act, 2017, which requires an appellant to deposit a sum equal to ten percent of the remaining amount of tax in dispute before filing an appeal. The petitioner admittedly failed to comply with this mandatory requirement. Furthermore, the Court noted that the order of the Joint Commissioner was appealable under Section 112 of the Act of 2017 before the Appellate Tribunal. Therefore, the writ petition filed before the High Court was premature. The Court granted liberty to the petitioner to move an appropriate application before the appellate authority seeking permission for depositing the 10% of the remaining tax amount, which the authority was directed to decide in accordance with law. The petition was disposed of on this basis.

Facts

The petitioner, M/s Shri Sshantanu Steel Traders, through its proprietor Vikash Kumar Mittal, filed a writ petition challenging an order dated 04-12-2021 passed by the Joint Commissioner, State Taxes, Durg. This order rejected the petitioner's appeal filed under Section 107 of the Central Goods and Services Tax Act, 2017. The rejection was due to the petitioner's failure to deposit 10% of the remaining tax amount in dispute, as mandated by Section 107(6)(b) of the Act. The original order imposing a tax liability of Rs. 1,14,80,992/- for the period from 01-06-2018 to 31-01-2019 was passed by the Assistant Commissioner, State Taxes, Circle-4, Durg, on 25-03-2021 & 01-04-2021.

Key Issues

1. Whether the rejection of the petitioner's appeal by the Joint Commissioner, State Taxes, Durg, under Section 107(6)(b) of the Central Goods and Services Tax Act, 2017, for failure to deposit 10% of the remaining tax amount in dispute, is legally sustainable? Petitioner's contention: The petitioner implicitly argues that the rejection of their appeal on procedural grounds, without considering the merits, is improper. They likely sought to have their appeal heard on its substance. Revenue's contention: The respondents (State of Chhattisgarh and its tax authorities) would argue that the appeal was rightly rejected as the petitioner failed to comply with the mandatory pre-deposit requirement stipulated in Section 107(6)(b) of the Act of 2017, which is a condition precedent for filing an appeal.