Case Law Details
K. L. Johar & Company Vs State Tax Officer (Kerala High Court)
HC held that Once this Court directed that the time spent in the writ petition is to be excluded, the Appellate Authority could not have done otherwise. However, contrary to the binding observations of this Court, extracted above, the Appellate Authority refused to condone the delay citing the reason that statute permits condonation of delay only up to 30 days. Since this Court had directed the Appellate Authority to exclude the period spent by the petitioner in pursuing the litigation in W.P.(C) No.2963 of 2018, and the said judgment became final, the Appellate Authority was bound to abide by it. Failure to abide by the binding directions in the said judgment has rendered the impuned order perverse.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
Petitioner is an assesseee under the Goods and Services Tax Act, 2017. Pursuant to proceedings initiated under section 129 of the CGST Act, 2017 (for short, ‘the Act’), an order was issued under section 129(3) of the Act. Since the appellate mechanism under the Act was not fully functional, petitioner had approached this Court under Article 226 of the Constitution of India in W.P.(C) No.6417 of 2018.
2. After the Appellate Authority has became fully functional, petitioner expressed its intention to pursue the statutory remedy. On the basis of the aforesaid submission, this Court disposed of W.P.(C) No.6417 of 2018 by judgment dated 04.10.2018 observing that the Appellate Authority, while revoking the limitation, should exclude the time spent by the petitioner in the writ petition.
3. Pursuant to the judgment referred above, petitioner offered an appeal before the second respondent. Despite the finding in the judgment of this Court, the Appellate Authority issued a notice of defect, to the petitioner stating that the appeal is proposed to be rejected on the basis of three defects noticed. The defects noticed were (i) limitation, (ii) failure to remove the pre-deposit and (iii) court fee payable towards the Kerala Legal Benefit Fund had not been paid. The Appellate Authority dismissed the appeal on the basis of the defects noticed. Petitioner challenges the order rejecting the appeal as defective.
4. Learned counsel for the petitioner submitted that the impugned order of the second respondent is perverse and is liable to be interfered with. Learned counsel also submitted that as far as the limitation period is concerned, this Court has specifically observed in Ext.P2 judgment that the Appellate Authority must exclude the time spent by the petitioner before this Court. The failure of the Appellate Authority to consider the said binding direction has rendered the order patently erroneous and perverse. It is also submitted on behalf of the petitioner that the requirement of a pre-deposit under section 107 of the Act does not arise in the instant case since the bank guarantee furnished by the petitioner for release of the goods were encashed and the entire amounts were available with the first respondent itself and hence a further requirement of pre-deposit was not contemplated under the Act. As far as the contribution towards Kerala Legal Benefit Fund was concerned, the learned counsel submitted that at the time when the appeal was preferred, there was a confusion regarding the amount payable. In the meantime, this Court had considered the said issue in the judgment in W.P.(C) No.6417 of 2018 that the petitioner is willing to pay the said court fee. In view of the above, learned counsel submitted that the impugned order is liable to be set aside.
5. I have heard Adv.Harisankar V.Menon, the learned counsel for the petitioner, Smt.M.M.Jasmin, the learned Government Pleader for respondents 1 to 4 as well as Sri.S.Manu, learned Assistant Solicitor General of India for the fifth respondent.
6. Smt. M.M.Jasmin, the learned Government Pleader submitted that the direction of this Court in Ext.P2 is not seen considered by the Appellate Authority and since the said aspect has not been considered, the matter may require a remand.
7. On a consideration of the rival contentions, I am of the view that the impugned order is liable to be set aside and a reconsideration of the matter is necessary.
8. As rightly submitted by the learned counsel for the petitioner, this Court had observed in Ext.P2 as follows:
“9. Therefore, if the petitioner files a statutory appeal, it meets the ends of justice if the Appellate Authority, while revoking limitation, excludes the time the petitioner spent here in this writ petition. I order so.”
9. The said direction is binding upon the second respondent. Once this Court directed that the time spent in the writ petition is to be excluded, the Appellate Authority could not have done otherwise. However, contrary to the binding observations of this Court, extracted above, the Appellate Authority refused to condone the delay citing the reason that statute permits condonation of delay only up to 30 days. Since this Court had directed the Appellate Authority to exclude the period spent by the petitioner in pursuing the litigation in W.P.(C) No.2963 of 2018, and the said judgment became final, the Appellate Authority was bound to abide by it. Failure to abide by the binding directions in the said judgment has rendered the impuned order perverse.
10. As far as the mandatory pre-deposit is concerned, as rightly pointed out by the learned counsel for the petitioner, since the bank guarantee furnished by the petitioner is alleged to have been invoked, the said matter ought to have been considered by the Appellate Authority. Once the entire tax and penalty imposed on the petitioner and secured by the Bank Guarantee was fully satisfied by invoking the guarantee, there cannot be any insistence of a further payment contemplated under section 107(6)(b). This aspect was not considered in Ext.P5. Failure to consider the alleged encashment of bank guarantee has also rendered the impugned order perverse.
11. Since the learned counsel for the petitioner has offered to pay the court fee towards Kerala Legal Benefit Fund, such an opportunity can also be granted.
12. In view of the above, if the petitioner deposits the court fee towards the Kerala Legal Benefit Fund within 30 days from the date of receipt of a copy of the judgment, the respondents shall reconsider the application, and pass orders restoring the appeal back to file and consider the appeal on merits in accordance with law. In order to enable such consideration, the impugned order dated 10.02.2022 is set aside.
The writ petition is allowed as above.
Corrigendum
Dated 01.04.2022
The words “Dated this the 2nd day of March, 2021” in the header of the judgment shall be read as “Dated this the 2nd day of March, 2022”.
