– “The right of appeal which is created under statute is a substantive right of the party that cannot be denied by taking pedantic view”
In a major decision the Andhra Pradesh High Court condoned a delay of 25 days and noted that the mandatory 10% pre-deposit for filing Goods and Service Tax (GST) appeal is not possible if the bank account is freezed.
The Assistant Commissioner (ST) Regional GST Audit and Enforcement Wing conducted inspection in the business premises of the petitioner and ascertained taxable amount of Rs.5,48,29,347/- including tax, penalty and interest.
The petitioner, M/s S A Iron and Metal, challenged the correctness of the order passed by the Assessing Authority under Section 107 of the A.P. G.S.T Act, 2017 along with a request to condone delay of 25 days in preferring the appeal. As the petitioner’s accounts were frozen by the Department, he could not mobilize the funds required for pre-deposit of 10% of the disputed tax for filing appeal, which is mandatory and the appeal was rejected.
The counsel for the petitioner would submit that though the petitioner preferred appeal within condonable period of limitation, the Appellate Authority rejected the appeal without considering the genuine reason for the petitioner filing appeal with delay and passed the impugned order, which is not tenable under law.
The Government Pleader submitted that the impugned order is a reasoned order and that the petitioner, without giving any details of the financial crisis his business faced, simply mentioned that he has faced unforeseen and severe financial crisis. The plea regarding the difficulties in securing the loan amount also far from truth.
A Division Bench comprising Justices U Durga Prasad Rao and Venkata Jyothirmayi Pratapa opined that “When the bank account of the petitioner is freezed by the authorities, it is a relevant fact to consider the delay since the pre-deposit of 10% disputed tax at the time of filing of the appeal is mandatory. The view taken by the learned Commissioner appears to be forcing the horse to run after tying the legs.”
“We are not convinced with the reasons assigned by the learned Commissioner in rejecting the appeal. Since, it is within the condonable period of limitation as the cause for the delay is suffice to entertain the appeal. On appreciation of the language employed under Section 107 (4) of CGST Act and in the back drop the factual and legal background, we are of the view that the impugned order deserves to be set aside” the Court noted.
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