Court allows assessee to file appeal once Appellate Tribunal is constituted, as goods already released.

Case Name:

M/s. Kay Pan Fragrance Pvt. Ltd. Vs. State Of U.P. And 4 Others (GST HC Case)

Key Takeaways:

- The court upheld the principle of exhausting statutory remedies before approaching the court for relief.

- The decision highlights the court’s discretion in dealing with cases where the statutory appellate authority is not yet constituted.

- It underscores the importance of adhering to the prescribed legal remedies and timelines.

Issue:

Whether the court should entertain the petitioner’s writ petition challenging the penalty and appellate orders, given that the statutory remedy of appeal under Section 112 of the Central Goods and Services Tax (CGST) Act, 2017, was available but could not be availed due to the non-constitution of the Appellate Tribunal.

Facts:

M/s Kay Pan Fragrance Pvt. Ltd. had filed a writ petition under Article 226 of the Constitution, challenging the penalty order dated 18.12.2017, the appellate order dated 06.01.2018, and seeking a direction to refund the security deposit. The petitioner bypassed the statutory remedy of appeal under Section 112 of the CGST Act on the ground that the Appellate Tribunal had not been constituted.

Arguments:

The petitioner argued that since the Appellate Tribunal was not constituted, they could not avail the statutory remedy of appeal under Section 112 of the CGST Act, necessitating the filing of the writ petition.

The respondents (GST authorities) contended that the petitioner should be given an opportunity to comply with the court’s order, as the Government had issued the Central Goods and Service Tax (Ninth Removal of Difficulties) Order, 2019, to address the issue of non-constitution of the Tribunal.

Key Legal Precedents:

The court did not cite any specific legal precedents but relied on the general principle that when an alternative statutory remedy is available, the court should not entertain a writ petition.

Judgement:

The Allahabad High Court dismissed the writ petition filed by M/s Kay Pan Fragrance Pvt. Ltd. However, the court provided the petitioner with an opportunity to invoke the remedy of filing an appeal before the Appellate Tribunal once it is constituted, in terms of the provisions of the Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019.

The court directed the petitioner to supply duly stamped envelopes addressed to the GST authorities and a self-addressed envelope to the court office within two weeks. The court office was directed to send a copy of the order along with the contempt application to the GST authorities, who were required to comply with the directions and intimate the petitioner through the self-addressed envelope within a week thereafter.

FAQs:

Q1: What was the main issue in this case?

A1: The main issue was whether the court should entertain the petitioner’s writ petition challenging the penalty and appellate orders, given that the statutory remedy of appeal under Section 112 of the CGST Act was available but could not be availed due to the non-constitution of the Appellate Tribunal.

Q2: Why did the court dismiss the writ petition?

A2: The court dismissed the writ petition based on the principle that when an alternative statutory remedy is available, the court should not entertain a writ petition. However, the court provided the petitioner with an opportunity to file an appeal once the Appellate Tribunal is constituted.

Q3: What was the significance of the Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019, in this case?

A3: The Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019, addressed the issue of non-constitution of the Appellate Tribunal by stipulating that the three-month period for filing an appeal shall be considered from the date the President or State President of the Appellate Tribunal enters office after its constitution.

Q4: What directions did the court give regarding the filing of the appeal?A4: The court directed the petitioner to supply duly stamped envelopes addressed to the GST authorities and a self-addressed envelope to the court office within two weeks. The court office was directed to send a copy of the order along with the contempt application to the GST authorities, who were required to comply with the directions and intimate the petitioner through the self-addressed envelope within a week thereafter.

Q5: Were any specific legal precedents cited in the judgment?

A5: No, the court did not cite any specific legal precedents but relied on the general principle regarding the availability of an alternative statutory remedy.

Heard Ms. Pooja Talwar, learned counsel for the petitioner and Sri B.K. Pandey, learned Standing Counsel for the respondents.

The petitioner has preferred the instant petition under Article 226 of the Constitution challenging the penalty order dated 18.12.2017, the appellate order dated 6.1.2018 and also for a direction to the respondent authorities to refund the full amount of security deposited by the petitioner.

It is not disputed that the impugned orders are appealable under Section 112 of the C.G.S.T. Act, 2017. The appeal is to be filed within 90 days from the date on which the order sought to be appealed is communicated to the person preferring the appeal. The instant petition has been filed by-passing the remedy of appeal under Section 112 of the Act on the ground that the appellate tribunal has not been constituted till date.

It has been pointed out by learned standing counsel that the Government, having regard to the difficulty faced by the assessees in filing appeal on account of non-constitution of the Tribunal and its Benches in various States and Union Territories, has issued Central Goods and Service Tax (Ninth Removal of Difficulties) Order, 2019 notified in the Gazette of India dated 3rd December, 2019 stipulating that in such a situation, the three months' period shall be considered to be the date on which the President or the State President, as the case may be, of the Appellate Tribunal after its constitution under Section 109, enters office. It is urged that in such

circumstances, the petitioner can wait and avail the remedy of filing appeal as and when the Tribunal is constituted. It is also pointed out that since the seized goods have already been released, therefore, no prejudice is going to be caused to the petitioner at the present moment.

Learned counsel for the petitioner very fairly admits the above legal position and also the fact that the goods have already been released.

In view of the above, the instant petition is disposed of by providing that the petitioner can invoke the remedy of filing appeal before the Tribunal in terms of the provisions of the Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019.

(Manoj Kumar Gupta, J.)

Order Date :- 16.6.2020

Jaideep/-