Sri. Nandi Studio And Colour Lab Vs Assistant Commissioner of Central Tax (Karnataka High Court)
The Karnataka High Court addressed a petition filed by Sri. Nandi Studio And Colour Lab challenging an order from the Appellate Authority (respondent No.2) that rejected their GST appeal. The sole reason for rejection was the non-deposit of the mandatory 10% of the disputed tax amount along with the appeal filing. The original order demanding tax was passed on 20.10.2021 under Section 74 of the Goods and Services Tax Act, 2017. The petitioner filed an appeal against this order on 02.12.2021, which was within the three-month limitation period stipulated under Section 107 of the same Act. Crucially, the 10% statutory deposit was made five days later, on 07.12.2021, which also fell within the prescribed appeal limitation period.
The petitioner argued that the Appellate Authority erred in dismissing the appeal because the statutory deposit, though not made simultaneously with the appeal, was completed within the allowed time frame for filing the appeal itself. The High Court concurred with this argument. It noted that while Section 107(6)(b) of the GST Act states that no appeal shall be filed unless the appellant pays 10% of the disputed tax, a liberal interpretation should be applied when the deposit is made within the overall limitation period for filing the appeal under Section 107(1). In this case, both the filing of the appeal and the subsequent deposit were completed within the statutory three-month period. Consequently, the High Court allowed the writ petition, quashed the Appellate Authority’s rejection order, and directed the authority to consider the petitioner’s appeal on its merits.
