The Calcutta High Court in a recent ruling held that the court held that the petitioner’s statutory right to challenge the order passed under Section 129 (3) of the Goods and Service Tax ( GST ) Act, 2017 cannot be defeated by reason of technical glitches.The court restored the appeal filed by the petitioner by setting aside the orders of rejection.
Rahul Bansal,the petitioner challenged the orders passed under Sections 107 of the GST Act, 2017 (“said Act”).The petitioner carries on business in the name and style of M/s R.S. Steel Company and in usual course of business dealings and transactions had been supplying goods from its registered place of business. When the petitioner was supplying the goods covered under respective invoices, all dated 25th July 2022 and 26th July 2022 through a transporter namely M/s Manish Carriers, from the Kolkata to Assam the goods in question along with the vehicle was intercepted by the respondent no. 1 on 28th July 2022 on the ground of failure on the part of the driver of the conveyance to produce all relevant documents before the concerned authorities.
The same was followed by an order of detention under Section 129 (1) of the said Act dated 30th July 2022 and a show cause notice under Section 129(3) of the said Act. It may be seen that the petitioner, in terms of Section 129(1) (a) of the said Act had got the said goods released upon payment of penalty and consequent thereupon the release order dated 30th July 2022 was passed. It would also appear from the record that the proceeding under Section 129(3) of the said Act was disposed of by an order dated 30th July 2022, thereby determining penalty to be paid by the petitioner which works out to Rs.3,07,083.2/-x 2 (Rs.6,14,166.4/-).
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Mr. Ghosh appeared for the petitioner and submitted that although, the petitioner had preferred an appeal from the aforesaid order passed under Section 129(3) of the said Act, and though the provisional acknowledgement for submission of the appeal was issued, however, such appeal was subsequently rejected on 30th June 2023, inter alia, on the ground that no amount of disputed tax/interest/penalty is mentioned in form GST APL- 01.
It was argued that the dismissal of the appeal was absolutely irregular, by reasons of a technical glitch the petitioner could not insert the disputed amount in the “disputed tax” column which ultimately resulted in the auto generated rejection of the appeal, by issuance of form GST APL- 02 on 30th June, 2023. I
The court observed that since the petitioner had not inserted the amount of penalty in the “disputed tax” column by reasons of technical glitch, the same was rejected by the appellate authority. The appellate authority ought to have taken into consideration the aforesaid and ought to have noted that the first appeal filed by the petitioner on 30th August 2022 was within the time prescribed and as such, ought to have condoned the delay in preferring the subsequent appeal.
Mr. Siddiqui, advocate appearing for the State submitted that the entire problem in connection with the above has arisen by reasons of the petitioner committing a technical error while filing the appeal under Section 107 of the said Act.
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The single bench of Raja Basu Chowdhury observed that the petitioner’s appeal was filed within time, by reasons of technical glitches the same was rejected. When the petitioner preferred the second appeal, as there is no option to seek review of the first appeal, the second appeal was rejected on the ground that there is no provision under Section 107 of the said Act to entertain the second appeal.
Considering the peculiar facts of the case, the court held that the petitioner’s statutory right to challenge the order passed under Section 129 (3) of the said Act cannot be defeated by reason of technical glitches.The court restored the appeal filed by the petitioner by setting aside the orders of rejection dated 30th June, 2023 and 19th September, 2023. The appellate authority is directed to hear out both the appeals by treating the same to be a composite appeal on merit, without insisting for any pre-deposit from the petitioner. The appellate authority shall dispose of the aforesaid appeal upon giving opportunity of personal hearing to the petitioner.
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