M/S Immacule Lifesciences PVT LTD vs. The State Of Hp And Others

Held

The High Court held that the mode and manner in which the petitioner's appeals were rejected by the statutory appellate authority was not sustainable in law. The Court emphasized that statutory appeals must be dealt with on a quasi-judicial side, requiring a speaking and reasoned order after hearing the party concerned. The rejection of the appeals via Annexures P-18 and P-19 in both petitions was quashed and set aside. The appellate authority was directed to restore the appeals, consider them along with the applications for condonation of delay, afford an opportunity of hearing to the petitioner, and pass appropriate orders. The issue regarding the legality of the CBIC circular dated 18.11.2019 was kept open for the petitioner to agitate in fresh proceedings if circumstances warranted.

Facts

The petitioner, M/s Immacule Lifesciences Pvt. Ltd., filed two writ petitions before the Himachal Pradesh High Court challenging orders rejecting their appeals against GST refund rejections. The primary grievance was that the statutory appellate authority rejected their appeals, which were filed with applications for condonation of delay, without passing a speaking order or affording an opportunity of hearing. The petitioner argued that this mechanical rejection was illegal and violated principles of natural justice. The respondents contended that the appeals were time-barred and thus rightly rejected by the appellate authority as per Section 107(4) of the Central GST Act, 2017, and that the system does not accept time-barred appeals. The petitioner also challenged a CBIC circular dated 18.11.2019 regarding the chronological application of refund applications and sought quashing of refund rejection orders for January 2022, March 2022, and April 2022 to March 2023.

Key Issues

1. Whether the rejection of the petitioner's appeals by the statutory appellate authority, accompanied by applications for condonation of delay, without passing a speaking order and without affording an opportunity of hearing, is illegal and contrary to the provisions of the Central GST Act, 2017 and principles of natural justice? (Section 107, Central GST Act, 2017). Petitioner's arguments: The rejection was mechanical, lacked quasi-judicial application of mind, and violated principles of natural justice. The appellate authority failed to consider the application for condonation of delay and provide reasons for rejection. Revenue's arguments: The appeals were time-barred as per Section 107(4) of the Central GST Act, 2017, and therefore, the system rightly rejected them, and the appellate authority's action was justified.