HC directs dept to allow Appeal Filing for Period Missed due to GST Portal Issue

East India Shipping Agency Vs State of West Bengal and others (Calcutta High Court)

Summary: The Calcutta High Court in the case of M/s East India Shipping Agency vs. State of West Bengal (Writ Petition No. 13030 of 2024) has directed the Revenue Department to allow the Petitioner to file an appeal for the disputed tax periods from 2020-21 to 2022-23. This ruling came after the Petitioner faced technical issues on the GST portal, preventing the filing of the composite appeal for the entire period under the order dated December 18, 2023, which covered April 2018 to March 2023. The Petitioner had responded to a Show Cause Notice issued in September 2023, but due to portal limitations, they could not file the appeal for the tax periods they wished to contest. The Court recognized that the portal’s technical issues hindered the appeal process and directed the Revenue Department to allow the filing of an appeal for the part period.

Introduction: In its judgment, the Calcutta High Court noted that the Petitioner must comply with the conditions under Section 107(6) of the CGST Act. This includes paying the full amount of tax, interest, fines, fees, and penalties for the periods not under dispute, along with 10% of the disputed tax for the periods of the appeal. Once these payments are made, the Court mandated that the Appellate Authority should admit the appeal and dispose of it on merits within eight weeks. The Petitioner has been given three weeks to submit the appeal. The ruling ensures that the Petitioner can pursue their appeal while adhering to legal requirements for partial appeal filing due to technical difficulties.

The Hon’ble Calcutta High Court, in the case of M/s. East India Shipping Agency v. State of West Bengal [Writ Petition No. 13030 of 2024 dated July 09, 2024] directed the Department to allow filing of the appeal filed for the part period, stating that the Department should allow filing of appeal for the disputed part period which could not be accepted due to technical issue on GST portal  (“the CGST Act”).

Facts:

M/s East India Shipping Agency (“the Petitioner”) was issued a Show Cause Notice dated September 21, 2023 (“the SCN”) under Section 74 of the CGST Act by the Revenue Department (“the Respondent”) and further, order dated December 18, 2023 (“the Impugned Order) was passed against the Petitioner, by the Respondent. The Petitioner, as advised, intends to file an appeal only for the tax period of 2020-21 to 2022-23, out of the Assessment Order covering a period of April 2018 to March 2023. However, the Petitioner has been unable to file the composite appeal due to the limitations of the portal.

Issue:

Whether filing of appeal for the part period could be restricted due to technical issue on GST portal?

Held:

The Hon’ble High Court of Calcutta, in the case of Writ Petition No. 13030 of 2024 held as under:

• Noted that, the Petitioner intends to file an appeal only for the tax periods from 2020-21 and 2022-23.
• Opined that, the Petitioner must fully pay the admitted tax, interest, fines, fees, and penalties as per the Impugned Order, for which the Petitioner do not wish to file an appeal.
• Held that, if the Petitioner makes the required payment of admitted amount under Section 107(6) of the CGST Act, and 10 percent of the disputed amount, the Respondent shall admit the appeal and hear the said appeal filed on merits.
• Directed that, the Petitioner shall file the appeal within three weeks and further directed the Appellate Authority to dispose of the appeal on the merits within eight weeks.

FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT

1. Leave granted to the petitioner’s advocate on record to correct the prayer portion in course of the day.

2. The present writ petition has been filed, inter alia, praying for a direction upon the respondents to allow the petitioner to file an appeal under Section 107 of the West Bengal GST/CGST Act, 2017 (hereinafter referred to as ‘the said Act’) limited to the specified tax period, that is, 2020-21 to 2022­23.

3. It is the petitioner’s case that pursuant to the show cause notice issued on 21st September, 2023 under Section 74 of the said Act, for the tax period April 2018 to March 2023, an order under Section 74 of the said Act had been passed on 18t^h December, 2023.

4. Although, the petitioner had duly responded to the show cause, the proper officer without considering the petitioner’s response appropriately, had disposed of the same.

5. The petitioner states that the petitioner has been advised to prefer an appeal only in respect of the tax period 2020-21 to 2022-23.

6. Unfortunately, since, the portal only permits the petitioner to file a composite appeal, from the order dated 18t^h December, 2023 the petitioner has been unable to file the same. Mr. Dutta learned advocate representing the petitioner submits, unless appropriate order is passed permitting the petitioner to prefer the appeal from part of the order dated 18t^h December, 2023, to the extent indicated hereinabove, the petitioner shall suffer irreparable prejudice.

7. Chakraborty, learned Advocate representing the respondents, by placing reliance on Section 107(6) of the said Act, submits that there cannot be any difficulty on the part of the petitioner to prefer an appeal from a part of the order under Section 74 of the said Act provided, the petitioner complies with the provisions of Section 107(6)(a) and (b) of the said Act.

8. He submits since, the petitioner is only interested to prefer an appeal for the tax period 2020-21 to 2022-23, the petitioner should pay in full, the amount of tax, interest, fine, fee and penalty arising out of the order dated 18^th December, 2023 insofar as the tax period for which the petitioner is not interested to prefer an appeal.

9. Heard the learned Advocates appearing for the respective parties and taking into consideration the materials on record, I am of the view that in the event the petitioner makes payment with the concerned respondents the entirety of the amount of tax, interest, fine, fee and penalty payable under Section 107(6)(a) of the said Act, in respect of determination made for the tax period for which the petitioner is not interested to prefer the appeal and pays a sum equal to 10 per cent of the remaining amount of the tax in dispute arising from the said order in respect of the tax period which forms subject matter of appeal, there cannot be any difficulty on the part of the respondents to admit the said appeal and hear out the same on merits.

10. Having regard to the above, if the appeal is filed within a period of three weeks from date, upon compliance of the conditions as indicated above, the Appellate Authority in such case would be obliged to consider and dispose of the said appeal on merits within a period of eight weeks from the date of filing of such appeal upon giving opportunity of hearing to the petitioner.

11. With the aforesaid directions, writ petition stands disposed of.

12. There shall be no order as to costs.

Urgent Photostat certified copy of this order, if applied for, be made available to the parties upon compliance with the necessary formalities.

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