GST Appellate Authority Fails to consider Transportation Bills and Related Documents: Calcutta HC Quashes Order [Read Order]

In a recent ruling, the Calcutta High Court quashed the GST appellate order due to the authority's failure to consider transportation bills and other supporting documents furnished by the petitioner before passing the order.

Soumyendu Bikash Jana, the petitioner filed a writ petition before the High Court challenging the GST appellate order passed under Section 107 of the West Bengal GST Act, 2017 where the appellate authority had rejected his appeal against an adjudication order.

Earlier, the petitioner was issued a show cause notice alleging short payment of tax on outward supplies during the period from April 2018 to March 2019 and wrongful availment of excess Input Tax Credit (ITC). As the petitioner could not submit a reply to the show cause notice, the adjudicating authority passed the order raising tax demand.

Aggrieved by the adjudication order, the petitioner filed an appeal before the appellate authority along with several documents to show that he was not liable to reverse any ITC. The petitioner claimed that he dealt in exempted goods and also acted as a Goods Transport Agency (GTA). According to him, no excess ITC was availed and for taxable supplies, the applicable taxes had already been paid.

Advocate for the petitioner, Mr. Ray argued that all relevant documents, including transportation bills, were submitted before the appellate authority but were not considered. The counsel submitted that the appellate authority rejected the appeal without properly examining the materials on record, making the decision perverse.

The counsel also pointed out that after the appellate order, the petitioner had already paid the differential tax amount, wherever applicable.

Counsel for the GST authorities, Mr. Chakraborty, argued that the appellate order did not require interference and was passed in accordance with the law.

After hearing both sides, the single-judge bench comprising Justice Om Narayan Rai observed that the petitioner had placed several documents before the appellate authority in support of his case. The court observed that the appellate authority failed to apply its mind and rejected the appeal without appreciating the value of the transportation bills and other documents produced.

The court also observed that the GST authorities could not demonstrate that the documents relied upon by the petitioner were not presented to the appellate authority. This clearly showed a lack of consideration of the material on record, rendering the appellate order legally unsustainable.

The court set aside the appellate order and remanded the matter to the appellate authority for fresh consideration. The petitioner was allowed to file an additional submission in support of his case and the appellate authority was directed to decide the appeal afresh within six weeks. The court clarified that it had not examined the merits of the case. The writ petition was disposed of with no order as to costs.

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