Patna High Court quashed Appellate Order which was dismissing appeal without assigning necessary reasons
What is section 107 of the CGST act?
Section 107 of CGST Act relates to Appeals made to Appellate Authority-
As per section 107. (1) Any person aggrieved by any decision or order passed under this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act by an adjudicating authority may appeal to such Appellate Authority as may be prescribed within three months from the date on which the said decision or order is communicated to such person.
(2) The Commissioner may, on his own motion, or upon request from the Commissioner of State tax or the Commissioner of Union territory tax, call for and examine the record of any proceedings in which an adjudicating authority has passed any decision or order under this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act , for the purpose of satisfying himself as to the legality or propriety of the said decision or order and may, by order, direct any officer subordinate to him to apply to the Appellate Authority within six months from the date of communication of the said decision or order for the determination of such points arising out of the said decision or order as may be specified by the Commissioner in his order.
(3) Where, in pursuance of an order under sub-section (2), the authorised officer makes an application to the Appellate Authority, such application shall be dealt with by the Appellate Authority as if it were an appeal made against the decision or order of the adjudicating authority and such authorised officer were an appellant and the provisions of this Act relating to appeals shall apply to such application.
(4) The Appellate Authority may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of three months or six months, as the case may be, allow it to be presented within a further period of one month.
(5) Every appeal under this section shall be in such form and shall be verified in such manner as may be prescribed.
(6) No appeal shall be filed under sub-section (1), unless the appellant has paid-
(a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and
(b) a sum equal to ten per cent. of the remaining amount of tax in dispute arising from the said order subject to a maximum of twenty-five crore rupees, in relation to which the appeal has been filed.
Provided that no appeal shall be filed against an order under sub-section (3) of section 129, unless a sum equal to twenty-five per cent. of the penalty has been paid by the appellant.
(7) Where the appellant has paid the amount under sub-section (6), the recovery proceedings for the balance amount shall be deemed to be stayed.
(8) The Appellate Authority shall give an opportunity to the appellant of being heard.
(9) The Appellate Authority may, if sufficient cause is shown at any stage of hearing of an appeal, grant time to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing:
Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal.
(10) The Appellate Authority may, at the time of hearing of an appeal, allow an appellant to add any ground of appeal not specified in the grounds of appeal, if it is satisfied that the omission of that ground from the grounds of appeal was not wilful or unreasonable.
(11) The Appellate Authority shall, after making such further inquiry as may be necessary, pass such order, as it thinks just and proper, confirming, modifying or annulling the decision or order appealed against but shall not refer the case back to the adjudicating authority that passed the said decision or order:
Provided that an order enhancing any fee or penalty or fine in lieu of confiscation or confiscating goods of greater value or reducing the amount of refund or input tax credit shall not be passed unless the appellant has been given a reasonable opportunity of showing cause against the proposed order:
Provided further that where the Appellate Authority is of the opinion that any tax has not been paid or short-paid or erroneously refunded, or where input tax credit has been wrongly availed or utilised, no order requiring the appellant to pay such tax or input tax credit shall be passed unless the appellant is given notice to show cause against the proposed order and the order is passed within the time limit specified under section 73 or section 74.
(12) The order of the Appellate Authority disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reasons for such decision.
(13) The Appellate Authority shall, where it is possible to do so, hear and decide every appeal within a period of one year from the date on which it is filed:
Provided that where the issuance of order is stayed by an order of a court or Tribunal, the period of such stay shall be excluded in computing the period of one year.
(14) On disposal of the appeal, the Appellate Authority shall communicate the order passed by it to the appellant, respondent and to the adjudicating authority.
(15) A copy of the order passed by the Appellate Authority shall also be sent to the jurisdictional Commissioner or the authority designated by him in this behalf and the jurisdictional Commissioner of State tax or Commissioner of Union Territory Tax or an authority designated by him in this behalf.
(16) Every order passed under this section shall, subject to the provisions of section 108 or section 113 or section 117 or section 118 be final and binding on the parties.“
Fact and Issue of the case
The petition has been filed by Pankaj Sharma (“the Petitioner”), against the Order-in-Appeal (“OIA”) dated January 28, 2021, passed by the Additional Commissioner of State Taxes (Appeal) dismissing the Petitioner’s appeal, only on the ground that the Petitioner has not submitted the certified copy of the Order-in-Original (“OIO”) dated March 06, 2020 on time, which was passed against the demand notice in Form GST DRC-07 dated March 06, 2020 levying tax, interest and penalty of INR 19,81,531/- for the period April 2018 to March 2019. The petition has been filed the to seek whether the Respondent was correct in dismissing the appeal filed by the Petitioner for non-submission of the certified copy of the Order-in-Original on time, by the Petitioner?
Observation of the court
The court noticed that the impugned order dated 28/01/2021 passed by the respondent no. 4, the Additional Commissioner of State Taxes (Appeal), Saran Division, Chhapra, cryptic in nature, needs to be set aside only on the ground that it does not even contain the reasons necessarily required for making the order self-explainable and/or comprehensible. The Appellate Authority summarily dismissed the appeal without assigning any cogent reason, thus, seriously prejudicing the petitioner’s cause and case.
It is stated before this Court that the petitioner has already deposited 100 per cent of the amount making the appeal mature to be heard on merits.
On the other hand, Shri Vikash Kumar, learned Standing Counsel No. 11, states that he has no objection with the matter being remanded to the appellate authority for consideration of the petitioner’s case on its own merit in accordance with law.
In view of the same, the petition stands disposed of in the following mutually agreeable terms:-
(a) Impugned order dated 28/01/2021 passed by the respondent no. 4, the Additional Commissioner of State Taxes (Appeal), Saran Division, Chhapra stands set aside;
(b) Petitioner shall appear before the appropriate authority on 16th of June, 2021 at 10:30 A.M., if possible through digital mode;
(c) Opportunity shall be granted to the parties to place on record all essential documents and materials, if so required and desired;
(d) Petitioner through learned counsel undertakes to fully cooperate in such proceedings and not take unnecessary adjournment;
(e) The appellate authority shall decide the appeal on merits expeditiously, preferably within a period of two months from the date of appearance of the petitioner, in compliance of the principles of natural justice;
(f) Equally, liberty reserved to the parties to take recourse to such other remedies as are otherwise available in accordance with law;
(g) We are hopeful that as and when petitioner takes recourse to such remedies, as are otherwise available in law, before the appropriate forum, the same shall be dealt with, in accordance with law and with reasonable dispatch.
(h) We have not expressed any opinion on merits and all issues are left open;
(i) If possible, proceedings during the time of current Pandemic [Covid-19] would be conducted through digital mode;
(j) Liberty reserved to the petitioner to challenge the order, if required and desired.
The court disposed the petition as per the above terms and ruled in favour of the petitioner.12