Order dismissing appeal without assigning necessary reasons not sustainable and is cryptic in nature

Pankaj Sharma Vs Union of India (Patna High Court)

The Hon’ble Patna High Court in Pankaj Sharma vs. UOI & Ors. [Civil Writ Jurisdiction Case No. 7431 dated June 01, 2021] set aside the order dismissing the appeal of the assessee passed by the Revenue Department, on the ground that the same is cryptic in nature as it does not contain the reasons necessarily required for making the order self-explainable and/or comprehensible. Held that, the Appellate Authority, summarily dismissed the appeal without assigning any cogent reason, which is seriously prejudicing the assessee’s cause and case.

Facts:

This petition has been filed by Pankaj Sharma (“the Petitioner”), against the Order-in-Appeal (“OIA”) dated January 28, 2021, (“Impugned order”) passed by the Additional Commissioner of State Taxes (Appeal) (“the Respondent”) dismissing the Petitioner’s appeal, only on the ground that the Petitioner has not submitted the certified copy of the Order-in-Original (“OIO”) dated March 06, 2020  on time, which was passed against the demand notice in Form GST DRC-07 dated March 06, 2020 levying tax, interest and penalty of INR 19,81,531/- for the period April 2018 to March 2019.

Issue:

Whether the Respondent was correct in dismissing the appeal filed by the Petitioner for non-submission of the certified copy of the OIO on time, by the Petitioner?

Held:

The Hon’ble Patna High Court in Civil Writ Jurisdiction Case No. 7431 decided on June 01, 2021 held as under:

• Noted that, the Petitioner’s appeal was dismissed only on the ground that the Petitioner did not submit the certified copy of the OIO on time.
• Observed that, the Respondent summarily dismissed the appeal without assigning any cogent reason, which seriously prejudicing the Petitioner cause and case.
• Further noted that, the Petitioner has already deposited 100% of amount making the appeal mature to be heard on merits.
• Held that, the Impugned order passed by the Respondent is cryptic in nature, and needs to be set aside only on the ground that it does not even contain the reasons necessarily required for making the order self-explainable and/or comprehensible.
• Set aside the Impugned order and remanded back the matter to the Respondent and directed the Petitioner to appear before the Respondent through digital mode due to current Pandemic, if possible.
• Further directed the Respondent to grant opportunity to the Petitioner to place on record all essential documents and materials, decide the appeal on merits expeditiously, within a period of 2 months, in compliance of the principles of natural justice and to deal with, in accordance with law and with reasonable dispatch.

Relevant Provisions:

Section 107 of CGST Act:

“Appeals to Appellate Authority-

107. (1) Any person aggrieved by any decision or order passed under this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act by an adjudicating authority may appeal to such Appellate Authority as may be prescribed within three months from the date on which the said decision or order is communicated to such person.

(2) The Commissioner may, on his own motion, or upon request from the Commissioner of State tax or the Commissioner of Union territory tax, call for and examine the record of any proceedings in which an adjudicating authority has passed any decision or order under this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act , for the purpose of satisfying himself as to the legality or propriety of the said decision or order and may, by order, direct any officer subordinate to him to apply to the Appellate Authority within six months from the date of communication of the said decision or order for the determination of such points arising out of the said decision or order as may be specified by the Commissioner in his order.

(3) Where, in pursuance of an order under sub-section (2), the authorised officer makes an application to the Appellate Authority, such application shall be dealt with by the Appellate Authority as if it were an appeal made against the decision or order of the adjudicating authority and such authorised officer were an appellant and the provisions of this Act relating to appeals shall apply to such application.

(4) The Appellate Authority may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of three months or six months, as the case may be, allow it to be presented within a further period of one month.

(5) Every appeal under this section shall be in such form and shall be verified in such manner as may be prescribed.

(6) No appeal shall be filed under sub-section (1), unless the appellant has paid-

(a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and

(b) a sum equal to ten per cent. of the remaining amount of tax in dispute arising from the said order subject to a maximum of twenty-five crore rupees, in relation to which the appeal has been filed.

Provided that no appeal shall be filed against an order under sub-section (3) of section 129, unless a sum equal to twenty-five per cent. of the penalty has been paid by the appellant.

(7) Where the appellant has paid the amount under sub-section (6), the recovery proceedings for the balance amount shall be deemed to be stayed.

(8) The Appellate Authority shall give an opportunity to the appellant of being heard.

(9) The Appellate Authority may, if sufficient cause is shown at any stage of hearing of an appeal, grant time to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing:

Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal.

(10) The Appellate Authority may, at the time of hearing of an appeal, allow an appellant to add any ground of appeal not specified in the grounds of appeal, if it is satisfied that the omission of that ground from the grounds of appeal was not wilful or unreasonable.

(11) The Appellate Authority shall, after making such further inquiry as may be necessary, pass such order, as it thinks just and proper, confirming, modifying or annulling the decision or order appealed against but shall not refer the case back to the adjudicating authority that passed the said decision or order:

Provided that an order enhancing any fee or penalty or fine in lieu of confiscation or confiscating goods of greater value or reducing the amount of refund or input tax credit shall not be passed unless the appellant has been given a reasonable opportunity of showing cause against the proposed order:

Provided further that where the Appellate Authority is of the opinion that any tax has not been paid or short-paid or erroneously refunded, or where input tax credit has been wrongly availed or utilised, no order requiring the appellant to pay such tax or input tax credit shall be passed unless the appellant is given notice to show cause against the proposed order and the order is passed within the time limit specified under section 73 or section 74.

(12) The order of the Appellate Authority disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reasons for such decision.

(13) The Appellate Authority shall, where it is possible to do so, hear and decide every appeal within a period of one year from the date on which it is filed:

Provided that where the issuance of order is stayed by an order of a court or Tribunal, the period of such stay shall be excluded in computing the period of one year.

(14) On disposal of the appeal, the Appellate Authority shall communicate the order passed by it to the appellant, respondent and to the adjudicating authority.

(15) A copy of the order passed by the Appellate Authority shall also be sent to the jurisdictional Commissioner or the authority designated by him in this behalf and the jurisdictional Commissioner of State tax or Commissioner of Union Territory Tax or an authority designated by him in this behalf.

(16) Every order passed under this section shall, subject to the provisions of section 108 or section 113 or section 117 or section 118 be final and binding on the parties.“

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FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT

Learned counsel for the parties desire the matter be taken up today.

Petitioner has prayed for the following relief(s):-

“(i) For issuance of a writ in the nature of Certiorari or any other appropriate writ or order for quashing of order-in-appeal dated 28/01/2021 passed by the respondent no. 4, the Additional Commissioner of State Taxes (Appeal), Saran Division, Chhapra whereby the appeal of the petitioner was dismissed only on the ground that the appellant has not submitted the certified copy of the impugned order in time, and further be pleased to quash the assessment order-in- original contained in Ref. No. ZAl003200086l3H dated 06/03/2020 passed under the signature of respondent no. 5 and the consequential demand notice contained in Form GST DRC-07 dated 06/03/2020 levying tax amounting to Rs. 17,11, 111.19/- (Rs. Seventeen lacs, eleven thousand, one hundred and eleven and nineteen parse only) alongwith interest of Rs. 93,540.67/- (Rs. Ninety three thousand, five hundred and forty and sixty seven paise only) and penalty of Rs. 1,76,879.28/- (Rs. One lacs and seventy six thousand eight hundred and seventy nine and twenty eight parse only), totalling to Rs. 19,81,531/- (Rs. Nineteen lacs, eighty one thousand, five hundred and thirty one only) for the period April 2018 to March 2019 — Financial Year 2018-19.

(ii) For issuance of an appropriate writ, order or direction for holding and declaring the Section 16(4) of the Central / Bihar Goods and Service Act, 2017 as ultra vires the provisions of Article 14, 19(1)(g) and 300A of the Constitution of India and also being violative of Section 16(1) and (2) and the basic structure of CGST/BGST Act, 2017.

(iii) For issuance of an appropriate writ, order or direction for holding and declaring the Rule 61(5) of the Central / Bihar Goods and Service Rules, 2017 as amended by notification no. 49/2019 with retrospective date of 01.07.2017, as ultra vires the provisions of Article 14, 19(1)(g) and 300A of the Constitution of India and also being violative of Section 16(1) and (2) and the basic structure of CGST/BGST Act, 2017.

(iv) In alternate be pleased to hold and declare that Section 16(4) of the CGST/BGST Act, 2017 and amended Rule 61(5) of the CGST/BGST Rules, 2017 are not applicable in the case of the petitioner.

(v) Be pleased to stay the operation of the demand notice contained in Form GST DRC-07 dated 06/03/2020 levying tax amounting to Rs. 17,1l,1ll.19/- (Rs. Seventeen lacs, eleven thousand, one hundred and eleven and nineteen paise only) alongwith interest of Rs. 93,540.67/- (Rs. Ninety three thousand, five hundred and forty and sixty seven paise only) and penalty of Rs. 1,76,879.28/- (Rs. One lacs and seventy six thousand eight hundred and seventy nine and twenty eight paise only), totalling to Rs. 19,81,531/- (Rs. Nineteen lacs, eighty one thousand, five hundred and thirty one only) for the period April 2018 to March 2019 — Financial Year 2018-19, during the pendency of the present writ application.

(vi) For issuance of a writ in the nature of certiorari for quashing of the attachment order dated 12/02/2021 (Annexure II) issued by the respondent no. 5 as being without competence and jurisdiction and violative of mandate of Section 83 of GST Act, and further be pleased to issue the writ of mandamus, or any other appropriate writ or direction, commanding the respondents to withdraw the attachment orders and unfreeze the following bank accounts of the petitioner (1) Bank account no. 60220844946 in the name of Jagdamba hardware, (2) Bank account no. 60332637456 and (3) Bank account no. 60175677940 both in the name of the petitioner Pankaj Sharma, all three bank accounts are with the Bank of Maharashtra, Chhapra branch, and further be pleased to restrain the respondents from taking any coercive action against the petitioner.

(vii) For issuance of any other appropriate writ, order or direction which Your Lordships may deem fit and proper in the facts and circumstances of the case.”

We notice that the impugned order dated 28/01/2021 passed by the respondent no. 4, the Additional Commissioner of State Taxes (Appeal), Saran Division, Chhapra, cryptic in nature, needs to be set aside only on the ground that it does not even contain the reasons necessarily required for making the order selfexplainable and/or comprehensible. The Appellate Authority summarily dismissed the appeal without assigning any cogent reason, thus, seriously prejudicing the petitioner’s cause and case.

It is stated before this Court that the petitioner has already deposited 100 per cent of the amount making the appeal mature to be heard on merits.

On the other hand, Shri Vikash Kumar, learned Standing Counsel No. 11, states that he has no objection with the matter being remanded to the appellate authority for consideration of the petitioner’s case on its own merit in accordance with law.

In view of the same, the petition stands disposed of in the following mutually agreeable terms:-

(a) Impugned order dated 28/01/2021 passed by the respondent no. 4, the Additional Commissioner of State Taxes (Appeal), Saran Division, Chhapra stands set aside;

(b) Petitioner shall appear before the appropriate authority on 16th of June, 2021 at 10:30 A.M., if possible through digital mode;

(c) Opportunity shall be granted to the parties to place on record all essential documents and materials, if so required and desired;

(d) Petitioner through learned counsel undertakes to fully cooperate in such proceedings and not take unnecessary adjournment;

(e) The appellate authority shall decide the appeal on merits expeditiously, preferably within a period of two months from the date of appearance of the petitioner, in compliance of the principles of natural justice;

(f) Equally, liberty reserved to the parties to take recourse to such other remedies as are otherwise available in accordance with law;

(g) We are hopeful that as and when petitioner takes recourse to such remedies, as are otherwise available in law, before the appropriate forum, the same shall be dealt with, in accordance with law and with reasonable dispatch.

(h) We have not expressed any opinion on merits and all issues are left open;

(i) If possible, proceedings during the time of current Pandemic [Covid-19] would be conducted through digital mode;

(j) Liberty reserved to the petitioner to challenge the order, if required and desired.

The instant petition sands disposed of in the aforesaid terms.

Interlocutory Application(s), if any, also stands disposed of.

Learned counsel for the respondents undertakes to communicate the order to the appropriate authority through electronic mode.

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