Facts of the Case

The petitioner, M/s D.K. Construction, challenged the order dated 27.07.2021 passed by the Additional Commissioner (Appeal), State Tax, Bhagalpur Division, whereby the petitioner's GST appeal was rejected solely on the grounds of delay and non-submission of the certified copy of the adjudication order. The appeal arose against an ex parte adjudication order dated 04.03.2020 passed under Section 74 of the Bihar Goods and Services Tax (BGST) Act, 2017 for the tax period 01.10.2018 to 31.03.2019, creating a demand of ₹2,58,912 comprising tax, interest, and penalty.

The petitioner contended that the delay occurred due to the COVID-19 pandemic and that the appellate authority mechanically dismissed the appeal without examining the merits of the case.

Issues Involved

  1. Whether the GST appellate authority was justified in rejecting the appeal solely on the ground of limitation during the COVID-19 pandemic.
  2. Whether rejection of the appeal for non-filing of a certified copy without considering the merits violated the principles of natural justice.
  3. Whether the matter deserved remand for fresh adjudication on merits after condoning the delay.

Petitioner's Arguments

  • The appellate authority rejected the appeal mechanically without considering the exceptional circumstances prevailing during the COVID-19 pandemic.
  • The delay in filing the appeal was sufficiently explained due to pandemic-related restrictions.
  • The appeal should not have been dismissed merely because the certified copy of the adjudication order was not filed.
  • The impugned appellate order was arbitrary, non-speaking, and contrary to law.
  • During the pendency of the writ petition, coercive recovery proceedings ought to be stayed.

Respondent's Arguments

  • Learned counsel appearing for the Revenue fairly submitted that if the matter was remanded, the department had no objection.
  • It was agreed that the appellate authority would not reject the appeal on the ground of limitation and would decide the matter on merits.
  • It was further agreed that no coercive recovery action would be taken during the pendency of the appeal.

Court Findings / Order

The Patna High Court held that the delay in filing the appeal stood sufficiently explained because of the COVID-19 restrictions. Accepting the consensus between the parties, the Court:

  • Quashed the appellate order dated 27.07.2021 passed in Form GST APL-02.
  • Restored the appeal to its original file.
  • Directed the Appellate Authority to condone the delay and decide the appeal strictly on merits.
  • Directed that adequate opportunity of hearing be provided to all parties in accordance with the principles of natural justice.
  • Directed the petitioner to deposit an additional 10% of the disputed demand within four weeks, without prejudice to its rights.
  • Ordered that any excess amount deposited shall be refunded if ultimately found refundable.
  • Directed immediate de-freezing/de-attachment of the petitioner's bank account, if attached in relation to the proceedings.
  • Directed the petitioner to appear before the Appellate Authority on the specified date.
  • Directed that no coercive steps for recovery shall be taken during the pendency of the appeal.
  • Directed the Appellate Authority to pass a reasoned and speaking order preferably within two months.
  • Clarified that the High Court had expressed no opinion on the merits of the dispute and all issues remained open for adjudication.

Important Clarification

  • Delay caused due to the COVID-19 pandemic deserves liberal consideration while dealing with GST appellate proceedings.
  • Appeals should ordinarily be decided on merits instead of being rejected on technical grounds where sufficient cause exists.
  • Mechanical dismissal of appeals merely on limitation or procedural defects, without examining the merits, is liable to be interfered with.
  • Principles of natural justice require that adequate opportunity of hearing be afforded before deciding tax disputes.
  • During the pendency of restored appellate proceedings, coercive recovery should ordinarily remain stayed where directed by the Court.

Sections Involved

  • Section 74 of the Bihar Goods and Services Tax (BGST) Act, 2017
  • Principles of Natural Justice
  • Appellate provisions under the BGST/GST law relating to filing of appeals and condonation of delay.

Link to download the order - https://mytaxexpert.co.in/uploads/1783924889_4021compressed.pdf

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.