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2025 (5) TMI 543 - HC - GSTDismissal of appeal on the ground of delay - statutory stay u/s 112(9) of the Act of 2017 during the pendency of the Appeal - HELD THAT - Considering the order dated 03.12.2019 issued by the Central Board of Indirect Taxes and Customs and further considering the order dated 09.05.2024 passed by the Co-ordinate Bench in M/S DIVYA STEELS 2024 (5) TMI 1549 - CHHATTISGARH HIGH COURT this Court finds it appropriate to direct that as soon as the President or State President enters the Office of Goods and Service Tax Appellate Tribunal constituted under the Act of 2017 the Petitioner may invoke the aforesaid provision for filing an Appeal after paying the statutory deposit. On such Appeal being filed the concerned authority shall decide the same strictly in accordance with law. The statutory stay as provided under Section 112 (9) of the Act 2017 would continue to remain in operation till the decision of said Appeal. Petition disposed off.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Court are:
2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Delay in filing the Appeal before GSTAT due to non-constitution of the Tribunal and its Benches Relevant legal framework and precedents: The limitation for filing Appeals under Section 112(1) of the Act of 2017 is three months from the date of communication of the order sought to be appealed against. However, the GSTAT and its Benches, as mandated under Section 109 of the Act, were not constituted in several States, including Chhattisgarh, causing practical difficulties in filing Appeals within the prescribed time. The Central Board of Indirect Taxes and Customs (CBIC) issued Order No.09/2019-Central Tax dated 03.12.2019, clarifying that for the purpose of limitation under Section 112, the three-month period shall commence from the date when the President or State President of the GSTAT enters office, if the Tribunal was not constituted at the time the order was communicated. Further, a coordinate Bench of this Court in W.P.(T) No.40/2023 (M/s. Divya Steels Vs. State of CG and Ors) and connected matters, vide order dated 09.05.2024, held that the Petitioner could file the Appeal after the President or State President assumes office, and such Appeal shall be decided on merits. Court's interpretation and reasoning: The Court acknowledged the CBIC's clarificatory order and the coordinate Bench's ruling as binding and relevant. It recognized the practical difficulty faced by the Petitioner in filing the Appeal within the prescribed limitation period due to the non-constitution of the GSTAT. Key evidence and findings: The Petitioner had filed the Appeal beyond the prescribed limitation period, which was dismissed by the Joint Commissioner (Appeal) on the ground of delay. The Petitioner relied on the CBIC order and the coordinate Bench's decision to justify the delay. Application of law to facts: Applying the CBIC's order and the coordinate Bench's ruling, the Court held that the limitation period for filing the Appeal should be considered from the date when the President or State President of the GSTAT enters office, not from the date of communication of the impugned order. Treatment of competing arguments: The Respondent did not oppose the Petitioner's prayer, implicitly conceding the applicability of the CBIC order and coordinate Bench judgment. The Court thus did not find any substantial counter-argument against condonation of delay on this ground. Conclusions: The Court directed that the Petitioner may file the Appeal after the President or State President of the GSTAT assumes office, and such Appeal shall be decided strictly in accordance with law. Issue 2: Statutory stay under Section 112(9) of the Act of 2017 during pendency of the Appeal Relevant legal framework: Section 112(9) of the Act of 2017 provides for a statutory stay of recovery proceedings during the pendency of an Appeal before the GSTAT, subject to deposit of a specified amount. Court's interpretation and reasoning: The Court held that the statutory stay as provided under Section 112(9) would continue to operate till the disposal of the Appeal filed pursuant to this order. Application of law to facts: Since the Petitioner was granted liberty to file the Appeal after the President or State President takes office, the stay would protect the Petitioner from coercive recovery actions during the pendency of such Appeal. Conclusions: The statutory stay remains in force until the Appeal is decided. Issue 3: Defreezing of the Petitioner's bank account frozen pursuant to impugned orders Relevant legal framework: Freezing of bank accounts is a coercive measure to recover tax dues pending adjudication or Appeal. Court's interpretation and reasoning: Given the directions to allow filing of Appeal and the statutory stay, the Court found it just and appropriate to order defreezing of the Petitioner's bank account subject to the final outcome of the Appeal. Application of law to facts: The Petitioner's bank account (No.32055557200, State Bank of India, Baradwar Branch) was frozen under the impugned orders. The Court ordered its defreezing to mitigate hardship pending Appeal. Conclusions: The bank account shall be defreezed but remains subject to final adjudication of the Appeal. Issue 4: Consequences of non-filing of Appeal within prescribed period and non-deposit of statutory amount Court's reasoning and directions: The Court clarified that if the Petitioner fails to file the Appeal within the prescribed limitation period after the President or State President enters office, the State is free to proceed with recovery of tax, interest, and penalty in accordance with law. Further, the Court stipulated that if the amount required under Section 112(8) of the Act for filing the Appeal is not deposited within 30 days from the date of the order, the order permitting filing of the Appeal and defreezing of the bank account shall lose its efficacy. Conclusions: The Petitioner must comply with the limitation and deposit requirements to avail the relief granted; otherwise, normal recovery proceedings may resume. 3. SIGNIFICANT HOLDINGS "For the purpose of calculating the date on which the order sought to be appealed against is communicated to the person preferring the Appeal under sub Section (1) of Section 112, the start of three months period shall be considered to be the date on which the
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