M/S New Aman Steel Through Its Sole Proprietor Jainab Bi vs. Union Of INDIA

Held

The Court, without examining the merits of the impugned order, granted liberty to the petitioner to avail the remedy as provided in para 3 of the Circular dated 11th July, 2024. This circular, specifically para 3, states that if an appeal is filed as per sub-section (8) of Section 112 of the CGST Act with the prescribed pre-deposit, the recovery proceedings for the balance amount shall be deemed to be stayed until the disposal of the appeal, as per sub-section (9) of Section 112. The Court's decision is based on the existence of this alternative mechanism provided by the circular, which offers a way forward in the absence of a functioning appellate tribunal. The ratio is that in situations where a statutory appellate forum is non-operational, High Courts may permit parties to avail alternative remedies or follow guidelines issued by the revenue authorities to manage pending disputes and recovery proceedings, thereby preserving the rights of the assessee while acknowledging the procedural deadlock.

Facts

The petitioner, M/s New Aman Steel, filed a writ petition before the Madhya Pradesh High Court challenging orders passed by the assessing officer and the appellate authority under the GST Act. The petitioner stated that while an appeal to the GST Appellate Tribunal under Section 112 of the GST Act was available, the Tribunal was not functioning, rendering this remedy unavailable. The State counsel brought to the Court's notice Circular No. 224/18/2024 - GST dated 11th July, 2024, issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs, providing guidelines for recovery of outstanding dues when the first appeal has been disposed of and the appellate tribunal is not operational.

Key Issues

1. Whether the petitioner can maintain a writ petition before the High Court when a statutory remedy of appeal to the GST Appellate Tribunal is available under Section 112 of the CGST Act, but the Tribunal is not functioning? The petitioner argued that due to the non-functioning of the GST Appellate Tribunal, the statutory remedy is unavailable, necessitating recourse to the High Court under Article 226 of the Constitution of India. The revenue/State contended that guidelines have been issued by the Central Board of Indirect Taxes and Customs (CBIC) in Circular No. 224/18/2024 - GST dated 11th July, 2024, to address such situations, providing a mechanism for recovery and stay of proceedings.