Sri. Nandi Studio And Colour Lab Vs Assistant Commissioner of Central Tax
Date: February 18, 2025
Subject Matter
Section 107(6) allows for the deposit to be considered valid even if it was made shortly after the filing of the appeal but within the prescribed limitation period
Summary
The petitioner challenged an order from the Appellate Authority, which dismissed their appeal because the required statutory deposit of 10% of the disputed tax amount was not made at the time of the appeal. The original order had been issued under Section 74 of the GST Act, and the petitioner filed the appeal within the stipulated timeframe provided by Section 107. - Although the statutory deposit was made five days after the filing of the appeal, it was still within the overall limitation period. The petitioner argued that the deposit made was timely and that the Appellate Authority erred in dismissing the appeal solely on the grounds of not having the deposit at the moment of filing. - The court agreed with the petitioner, stating that a liberal interpretation of Section 107(6) should allow for the deposit to be considered valid even if it was made shortly after the filing of the appeal but within the prescribed limitation period. Consequently, the court quashed the Appellate Authority’s order and instructed it to reconsider the petitioner’s appeal on its merits.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
The petitioner is before this Court under Article 226 of the Constitution of India, questioning Annexure-B, Order bearing No.MYS-SPP-ADC/JC(A)-090-2022-23-GST dated 29.12.2022 passed by respondent No.2-Appellate Authority, by which the petitioner’s appeal is rejected solely on the ground that the statutory deposit of 10% is not deposited along with appeal.
2.Heard R.Prathibhaand Sri.S.Parthasarathi, learned counsels for the petitioner and Sri. Aravind.V. Chavan, learned counsel for the respondents. Perused the writ petition papers.
3. Learned counsel for the petitioner would submit that the original order was passed on 20.10.2021 under Section74 of the Goods and Services Tax Act, 2017 (for short ‘2017 Act’). Learned counsel would submit that Section 107 of 2017 Act provides appeal remedy against the said order and it also provides for three months time to file appeal. It is submitted that against original order, the petitioner preferred an appeal before respondent No.2 on 02.12.2021, which was within the time prescribed under Section 107 of 2017 Act. Further, learned counsel would submit that the amount of 10% statutory deposit was made five days later i.e., 07.12.2021, which was within the period of limitation. Learned counsel for the petitioner would submit that respondent No.2-Appellate Authority committed grave error in dismissing the appeal without taking note of the fact that statutory deposit was made within limitation period. Therefore, learned counsel would pray for setting aside the order passed by the Appellate Authority and to direct the Appellate Authority to consider the appeal of the petitioner on merits.
4. Per contra, learned counsel for the respondents would submit that the petitioner failed to make statutory deposit along with appeal but he submits that deposit made on 07.12.2021 was within the period of limitation as prescribed under Section 107 of 2017 Act.
5. Having heard the learned counsels for the parties and on perusal of the entire writ petition papers, I am of the view that respondent No.2 – Appellate Authority ought not to have rejected petitioner’s appeal solely on the ground that 10% of the disputed amount of tax has not been deposited along with appeal.
6. Section 107 of the 2017 Act provides for appeal against decision or order passed under the Act and it also prescribes three months time to file appeal from the date of communication of the order. Further, one month extended time is provided under Section 107(4) of 2017 Act to file appeal and the said period could be condoned if acceptable cause is shown.
7. Section 107(6)(b) of 2017 Act states that no appeal shall be filed under Section 107(1) of 2017 Act, unless the appellant pay a sum equal to 10% of the remaining amount of tax in dispute arising from the order under appeal.
8. In the instant case, though the petitioner has not deposited the amount as required under Section 107(6)(b) of 2017 Act along with appeal, but deposited the said 10% of the amount within five days from the date of filing of the appeal. Both filing of the appeal and deposit as required under Section 107(6)(b) of 2017 Act was within the period of limitation prescribed under Section 107(1) of 2017 Act. A liberal interpretation is to be given to Section 107(6) of 2017 Act and if the statutory deposit as required is made within the limitation prescribed under Section 107(1) of 2017 Act, then it shall be treated as deposit made along with appeal. The petitioner filed an appeal as well as deposited the statutory deposit within the period of limitation prescribed under Section 107(1) of 2017 Act.
9. In view of the above, the following
ORDER
(a) Writ petition is allowed;
(b)Impugned Order bearing No.MYS-SPP- ADC/JC(A) 090-2022-23-GST dated 29.12.2022 (Annexure-B) passed by respondent No.2 is quashed.
(c) Respondent No.2 is directed to consider the appeal of the petitioner on merits.