Case Law Details
Indian Potash Limited Vs Deputy Commissioner of Commercial Taxes (Karnataka High Court)
In a recent ruling, the Karnataka HC held that Notice and endorsement issued without waiting for expiry of the appeal period of three months is illegal and arbitrary and liable to be quashed.
The respondent passed an order in original on 22.12.2023, which would entitle the petitioner to prefer an appeal against the said order within a period of four (4) months (3 + 1) from 22.12.2023 i.e., on or before 22.04.2024. It is the grievance of the petitioner that despite non-expiry of the appeal period of three months ending on 22.04.2024, the respondent issued the impugned Notice dated 23.01.2024 followed by the impugned Endorsement dated 09.02.2024, which are illegal, arbitrary and same deserves to be quashed. It is also submitted that the petitioner would prefer an appeal on or before 22.04.2024 and meanwhile, 10% that has been debited from the electronic credit ledger of the petitioner during the period 01.03.2024 to 20.03.2024, may be treated/stipulated as the pre-deposit for the purpose of appeal and necessary directions may be issued to the Appellate Authority to dispose of the appeal in accordance with law.
HC held that the order in original was passed on 22.12.2023, the petitioner would be entitled to prefer an appeal within a period of four (4) months (3 + 1) i.e., on or before 22.04.2024 as contemplated under Section 107 of the KGST hence impugned Notice dated 23.01.2024 and the impugned Endorsement dated 09.02.2024 issued by the respondent within the appeal period is clearly illegal and arbitrary and the same deserves to be quashed and necessary directions be issued to the petitioner and the appellate authority for the purposes of the appeal to be preferred by the petitioner.
Writ Petition was allowed with above directions.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
In this petition, the petitioner is aggrieved by the impugned Notice at Annexure-A dated 23.01.2024 and impugned Endorsement at Annexure-B dated 09.02.2024 issued by the respondent.
2. Heard the learned counsel for the petitioner and the learned counsel for the respondent and perused the material on record.
3. A perusal of the material on record will indicate that the respondent passed an order in original on 22.12.2023, which would entitle the petitioner to prefer an appeal against the said order within a period of four (4) months (3 + 1) from 22.12.2023 i.e., on or before 22.04.2024. It is the grievance of the petitioner that despite non-expiry of the appeal period of three months ending on 22.04.2024, the respondent issued the impugned Notice dated 23.01.2024 followed by the impugned Endorsement dated 09.02.2024, which are illegal, arbitrary and same deserves to be quashed. It is also submitted that the petitioner would prefer an appeal on or before 22.04.2024 and meanwhile, 10% that has been debited from the electronic credit ledger of the petitioner during the period 01.03.2024 to 20.03.2024, may be treated/stipulated as the pre-deposit for the purpose of appeal and necessary directions may be issued to the Appellate Authority to dispose of the appeal in accordance with law.
4.Per contra, Sri. Harisha A.S., the learned AGA for the respondent would oppose the said contention and submit that there is no merit in the petition and that the same is liable to be dismissed.
5. As rightly contended by the learned counsel for the petitioner, in the light of the undisputed fact that the order in original was passed on 22.12.2023, the petitioner would be entitled to prefer an appeal within a period of four (4) months (3 + 1) i.e., on or before 22.04.2024 as contemplated under Section 107 of the Karnataka Goods and Services Tax Act, 1971 (for short ‘KGST Act’).
6. Under these circumstances, I am of the considered opinion that the impugned Notice dated 23.01.2024 and the impugned Endorsement dated 09.02.2024 issued by the respondent within the appeal period is clearly illegal and arbitrary and the same deserves to be quashed and necessary directions be issued to the petitioner and the appellate authority for the purposes of the appeal to be preferred by the petitioner. It is also relevant to state that waiver of the period of three (4) months from the date of the order to prefer an appeal is permissible only under Section 78 of the KGST Act and that too for the reasons to be recorded in writing by the proper Officer as to why said period of three (3) months is to be dispensed with and by assigning reasons that the respondent would not be in a position to recover the said amount from the petitioner.
7. In the instant case, the impugned Notice and Endorsement do not contain any such reasons for invocation of Section 78 of the KGST Act in the facts of the instant case and on this ground, also impugned Notice and Endorsement deserves to be quashed.
8. In the result, I pass the following:
ORDER
i. Petition is allowed:
ii. The impugned Notice dated 23.01.2024 -Annexure-A and the impugned Endorsement dated 09.02.2024 – Annexure-B issued by the respondent, are hereby quashed;
iii. The petitioner is permitted to file an appeal before the Appellate Authority before 22.04.2024;
iv. In the event the petitioner files an appeal before the Appellate Authority before 22.04.2024, the aforesaid 10% amount said to be debited from the electronic credit ledger on 21.02.2024, is directed to be treated as 10% pre-deposit for the purpose of appeal to be preferred by the petitioner; and
v. The Appellate Authority shall dispose of the appeal to be preferred by the petitioner in accordance with law without insisting any additional pre-deposit by the petitioner.
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