Introduction: The Calcutta High Court recently addressed the case of K. D. Gupta & Company vs Assistant Commissioner concerning a delay in filing an appeal and the implications of a tax dispute related to an export transaction. The court’s decision offers insights into the nuances of GST appeals and penalty imposition under the West Bengal Goods and Services Tax Act, 2017.
Detailed Analysis: The case revolves around the interception of goods meant for export without a valid e-way bill. Despite the subsequent generation of the e-way bill, the detaining authority seized the goods, leading to penalty imposition by the adjudicating authority, which was upheld by the first appellate authority.
The appellants contested on two grounds: Firstly, they argued that as the transaction was for export, no tax should be levied. Secondly, they claimed lack of willful intention, attributing the fault to the uneducated driver who was unaware of the legal requirements.
Upon reviewing the order of the first appellate authority, the High Court observed a failure to adequately examine the appellants’ conduct and the export nature of the transaction. Consequently, the court set aside the order and remanded the matter to the appellate authority, granting the appellants an opportunity to present their case and establish the absence of tax liability and willful intent to evade tax.
The court emphasized the importance of affording the appellants a fair opportunity for personal hearing and document submission before the appellate authority. It directed the appellate authority to consider both aspects of the case and issue a reasoned order in compliance with the law within a stipulated timeframe.
Conclusion: The judgment in K. D. Gupta & Company vs Assistant Commissioner underscores the significance of due process in GST appeals and penalty imposition cases. By setting aside the previous order and providing the appellants with an opportunity to present their case, the court ensures fairness and adherence to legal principles. This decision serves as a reminder of the judiciary’s role in upholding the rights of taxpayers and maintaining the integrity of tax administration under GST laws.
FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT
1. This application has been filed to condone the delay of 16 days in filing the instant appeal.
2. We have heard Mr. Ankit Kanodia, learned counsel appearing for the appellants and Mr. Debasish Ghosh, learned Advocate for the State.
3. We are satisfied with the reasons assigned in the affidavit filed in support of the application. Accordingly, the delay in filing the instant appeal is condoned.
4. The application being I.A. CAN 2 of 2022 is allowed.
5. This intra Court appeal is directed against the order dated 25th July, 2022 in W.P.A. No.16047 of 2022 by which the learned Single Bench has declined to pass any interim order and directed affidavit-in-opposition to be filed by the respondents. Being aggrieved by such direction, the appellants are before us by way of filing this appeal. With the consent of either side, the writ petition itself is taken up for disposal along with this appeal.
6. As against an order passed by the Assistant Commissioner of State Tax, West Bengal, the appellants had filed an appeal before the first appellate authority under Section 107(1) of the West Bengal Goods and Services Tax Act, 2017 (for short, “the Act”).
7. The allegation against the appellants was that the goods which were meant for export were intercepted on 15th September, 2019 at about 8.35 a.m. and it was found the goods were not accompanied by the valid e-way bill. The appellants’ case is that at 10.47 a.m., the e-way bill was generated and it was made known to the detaining authority. Notwithstanding that, the said authority seized the goods and thereafter issued show cause notice and ultimately the order was passed imposing tax and penalty against which the appeal was filed before the first appellate authority, which was rejected.
8. The case of the appellants is two-folds; firstly, the transaction being an export transaction, no tax is payable and secondly, there was no wilful intention on the part of the appellants not to generate any e-way bill but they would contend that it is actually the fault of the driver of the vehicle, who was uneducated and did not know about the legal position. Be that as it may, if the transaction is an export transaction, then no tax is leviable. Consequently, the conduct of the appellants could have been examined both by the adjudicating authority as well as by the appellate authority while imposing penalty under Section 129 of the Act.
9. On perusal of the order passed by the first appellate authority, we find that such exercise has not been done. Therefore, we are of the view that one more opportunity can be granted to the appellants to show their bona fides.
10. For the above reasons, this appeal as well as the writ petition are disposed of and the order passed by the appellate authority dated 30th November, 2021 is set aside and the matter stands remanded to the appellate authority. The appeal shall stand restored in the file of the appellate authority and the appellants shall appear before the appellate authority and produce all documents to establish their case that no tax is leviable and there was no willful intention on their part to evade payment of tax so as to attract penalty, after affording an opportunity of personal hearing.
11. The appellate authority shall consider both aspects and pass a reasoned order on merits and in accordance with law as expeditiously as possible but preferably within a period of 12 weeks from the date of receipt of the server copy of this judgment and order.
12. We make it clear that we have not gone into the merits of the matter and all issues can be considered by the first appellate authority.
13. With the above directions, the appeal and the connected application being CAN 1 of 2022 are disposed of.
14. No order as to costs.
15. Urgent photostat certified copy of this order, if applied for, be furnished to the parties expeditiously upon compliance of all legal formalities.