Court directs assessee to avail remedy of filing appeal before GST Appellate Tribunal as per removal of difficulties order.

Case Name:

M/s. Spice Digital Ltd. Vs. State Of U.P. And 4 Others (GST HC Case)

Key Takeaways:

- The court followed the procedure laid down in Rule 1-A of Order XXVII of the Code of Civil Procedure, 1908, which requires issuing a notice to the Advocate General before considering the constitutional validity of a law.

- The court relied on the Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019, which provided a solution for filing appeals when the Appellate Tribunal was not constituted.

- The court did not grant interim relief or stay the demand of tax and penalty, citing the Supreme Court’s decision in Assistant Collector of Central Excise, Chandan Nagar West vs. Dunlop India Ltd.

Issue:

Whether the petitioner should avail the remedy of filing an appeal before the Appellate Tribunal as per the Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019, instead of challenging the order under Article 226 of the Constitution.

Facts:

The petitioner challenged an order dated 26.9.2019 passed by the respondent under Section 129(3) of the UP GST Act and CGST Act, 2017, and Section 20 of the IGST Act, 2017. The petitioner filed a writ petition under Article 226 of the Constitution, bypassing the remedy of appeal under Section 112 of the CGST Act, 2017, on the ground that the Appellate Tribunal had not been constituted.

Arguments:

The petitioner argued that the impugned order should be challenged under Article 226 of the Constitution since the Appellate Tribunal had not been constituted.

The state contended that the petitioner should have availed the remedy of filing an appeal under Section 112 of the CGST Act, 2017, as per the Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019.

Key Legal Precedents:

Rule 1-A of Order XXVII of the Code of Civil Procedure, 1908:

This rule requires issuing a notice to the Attorney General or Advocate General before granting a declaration about the invalidity of a law by the High Court.

Assistant Collector of Central Excise, Chandan Nagar West vs. Dunlop India Ltd. and others; 1985 SCC (1) 260:

This Supreme Court case was cited to deny interim relief or a blanket stay on the demand of tax and penalty.

Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019:

This order provided a solution for filing appeals when the Appellate Tribunal was not constituted.

Judgement:

The High Court disposed of the writ petition, directing the petitioner to avail the remedy of filing an appeal before the Appellate Tribunal in terms of the provisions of the Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019. The court issued a notice to the Advocate General following Rule 1-A of Order XXVII of the Code of Civil Procedure, 1908. The court did not grant interim relief or stay the demand of tax and penalty, citing the Supreme Court’s decision in Assistant Collector of Central Excise, Chandan Nagar West vs. Dunlop India Ltd.

FAQs:

Q1: What was the main issue in this case?

A1: The main issue was whether the petitioner should avail the remedy of filing an appeal before the Appellate Tribunal as per the Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019, instead of challenging the order under Article 226 of the Constitution.

Q2: Why did the court issue a notice to the Advocate General?

A2: The court issued a notice to the Advocate General following Rule 1-A of Order XXVII of the Code of Civil Procedure, 1908, which requires such a notice before considering the constitutional validity of a law.

Q3: Did the court grant any interim relief or stay on the demand of tax and penalty?

A3: No, the court did not grant interim relief or stay the demand of tax and penalty, citing the Supreme Court’s decision in Assistant Collector of Central Excise, Chandan Nagar West vs. Dunlop India Ltd.

Q4: What was the court’s decision in this case?

A4: The court disposed of the writ petition, directing the petitioner to avail the remedy of filing an appeal before the Appellate Tribunal as per the Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019.

Q5: What is the significance of the Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019?

A5: This order provided a solution for filing appeals when the Appellate Tribunal was not constituted, allowing assessees to file appeals within a specified period after the constitution of the Tribunal.

Heard learned counsel for the petitioner, Sri Jagdish Mishra learned Standing Counsel for the State and Sri Dinesh Varun for the respondent no. 5.The petitioner has preferred the instant petition under Article 226 of the Constitution challenging the order dated 26.9.2019 passed in Appeal No.17/2019 by the respondent no.3 under Section 129 (3) of the U.P. G.S.T. Act and C.G.S.T. Act, 2017/ Section 20 of the IGST Act, 2017. It is not disputed that the impugned order is 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 bye-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.

Order Date :- 13.7.2020

PK