Altec Fabricators Vs Assistant Commissioner (Madras High Court)
Summary: The Madurai Bench of the Madras High Court considered a writ appeal filed by M/s. Altec Fabricators against the order of the learned Single Judge directing the appellant to deposit 25% of the disputed tax amount of Rs.5,23,09,082/- within six months.
The appellant had challenged an order in Form GST DRC-07 bearing Reference No. ZD330824285003J dated 30.08.2024, under which the first respondent demanded CGST of Rs.2,61,54,541/- and SGST of Rs.2,61,54,541/-. The demand arose following scrutiny of statutory monthly returns for the financial year 2019–2020. According to the appellant’s submissions, the show cause notice dated 27.05.2024 was uploaded on the GST portal and was not served through any other mode. The issues raised concerned reconciliation of E-way Bill turnover with GSTR-01, reconciliation of turnover reported in GSTR-07 with supplies declared in GSTR-09, and interest liability arising from delayed filing of GSTR-3B.
The appellant stated that the total tax demand was Rs.5,23,09,082/-, comprising CGST and SGST of Rs.2,61,54,541/- each. Interest was stated to be Rs.4,37,94,841/-, comprising CGST of Rs.2,18,69,777/-, SGST of Rs.2,18,69,777/- and IGST of Rs.45,387/-. Penalty was stated to be Rs.52,30,908/-, comprising CGST and SGST of Rs.26,15,454/- each. It was further submitted that the first respondent proceeded to pass the impugned order dated 30.08.2024 along with a detailed order dated 22.08.2024 under Section 73 of the CGST Act, 2017, without affording an adequate opportunity to respond to the show cause notice.
The appellant thereafter preferred an appeal before the Deputy Commissioner (ST), Trichy. It submitted that, under Section 107 of the CGST Act, an appeal required a pre-deposit of 10% of the disputed tax, amounting to Rs.52,30,908/-. The appellant stated that Rs.22,45,544/- had already been recovered, leaving a balance of Rs.29,84,365/- to be paid. The appellate authority dismissed the appeal, following which the appellant approached the High Court.
The learned Single Judge disposed of the writ petition by directing the appellant to deposit 25% of the disputed tax. In the writ appeal, the appellant’s Senior Counsel submitted that only 10% of the disputed tax was required as pre-deposit and that the appellant had already paid a substantial sum of Rs.49,00,000/-. It was submitted that only a small portion of the mandatory pre-deposit remained unpaid and that the appellant was ready to deposit the remaining amount within three weeks. The appellant therefore sought an opportunity to comply with the requirement and restoration of the appeal for decision on merits.
The Division Bench, comprising N. Sathish Kumar, J. and M. Jothiraman, J., noted that the appellant had already deposited a substantial amount of Rs.49,00,000/-. The Court directed the appellant to deposit the remaining balance of the required 10% pre-deposit within three weeks. Upon such deposit, the appeal was directed to be restored to file and disposed of on merits and in accordance with law. The Court also noted that there had been only a seven-day delay in preferring the appeal.
Accordingly, the writ appeal was disposed of with the above directions, without costs, and the connected miscellaneous petition was closed. The Court did not adjudicate the underlying tax demand on merits; the relief was confined to enabling compliance with the required 10% pre-deposit and restoration of the statutory appeal.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
Challenging the order of the learned Single Judge directing the appellant to deposit 25% of the disputed tax amounting to Rs.5,23,09,082/- within a period of six months from the date of receipt of a copy of the order, the present writ appeal has been filed.
2. The appellant had filed the writ petition challenging the impugned order in Form GST DRC-07 bearing Reference No. ZD330824285003J dated 30.08.2024, whereby the first respondent demanded tax of Rs.2,61,54,541/- each under the CGST Act and the SGST Act.
3. The learned counsel appearing for the appellant submitted that, upon scrutiny of the statutory monthly returns filed for the financial year 2019–2020, the first respondent issued a show cause notice dated 27.05.2024. The said notice was uploaded on the GST portal and was not served through any other mode. The allegations in the show cause notice pertain to: (i) Reconciliation of E-way Bill turnover with GSTR-01;(ii) Reconciliation of turnover reported in GSTR-07 with supplies declared in GSTR-09; and (iii) Interest liability due to delayed filing of GSTR-3B. The total tax demand amounts to Rs.5,23,09,082/- (CGST: Rs. 2,61,54,541/- and SGST: Rs.2,61,54,541/-), along with interest of Rs. 4,37,94,841/- (CGST: Rs.2,18,69,777/-; SGST: Rs.2,18,69,777/-; IGST: Rs. 45,387/-) and penalty of Rs.52,30,908/- (CGST: Rs.26,15,454/-; SGST: Rs.26,15,454/-). It is the further submission of the appellant that the first respondent, without affording an adequate opportunity to respond to the show cause notice, proceeded to pass the impugned order dated 30.08.2024 along with a detailed order dated 22.08.2024 under Section 73 of the CGST Act, 2017.
4. Aggrieved thereby, the appellant preferred an appeal before the Deputy Commissioner (ST), Trichy. The appellant submitted that under Section 107 of the GST Act, filing of an appeal requires a pre-deposit of 10% of the disputed tax, amounting to Rs.52,30,908/-. Out of this, a sum of Rs.22,45,544/- had already been recovered, leaving a balance of Rs.29,84,365/- to be paid. The appellate authority, after due consideration, dismissed the appeal. Challenging the same, the appellant filed the writ petition. The learned Single Judge disposed of the writ petition by directing the appellant to deposit 25% of the disputed tax amount.
5. The learned Senior Counsel appearing for the appellant submitted that for filing an appeal, only 10% of the disputed tax is required to be deposited, and the appellant has already paid a substantial sum of Rs.49,00,000/-. It is further submitted that only a small portion of the mandatory pre-deposit remains unpaid, and the appellant is ready to deposit the remaining amount within a period of three weeks. Therefore, it is prayed that an opportunity be granted to comply with the requirement and the appeal be restored and decided on merits.
6. Considering the submissions, it is noted that the appellant has already deposited a substantial amount of Rs.49,00,000/-. The appellant is directed to deposit the remaining balance of the required 10% pre-deposit within a period of three weeks. On such deposit, the appeal shall be restored to file and dispose of on merits and in accordance with law. It is also noted that there was only a delay of seven days in preferring the appeal.
7. With the above directions, the writ appeal is disposed of. No costs. Consequently, connected miscellaneous petition is closed.
