Facts of the Case

The petitioner, Madan Kumar, a proprietor/civil contractor operating from Ladugarh, Janakinagar, Purnea, Bihar (GSTIN 10CJRPK6948RIZA), was assessed by the Deputy Commissioner of State Taxes, Purnea Circle, vide order dated 25.01.2021, along with a summary of demand in Form GST DRC-07 (reference no. ZD100121022223M) for the period April 2019 to March 2020. The petitioner's appeal, filed under ARN No. AD100921000126X, was rejected by the Additional Commissioner of State Taxes (Appeal), Purnea Division, vide order dated 27.10.2021. Aggrieved by this appellate rejection, the petitioner approached the Patna High Court in CWJC No.4763 of 2022, seeking to have both the original assessment and the appellate order set aside.

Issues Involved

  1. Whether the appellate order rejecting the appeal was sustainable when it was cryptic, misconceived and non-speaking.
  2. Whether the appeal ought to be restored and decided on merits, condoning any delay, in the interest of natural justice.

Petitioner's Arguments

  • The impugned appellate order dated 27.10.2021 was passed without assigning any cogent reasons and failed to engage with the grounds raised in the appeal.
  • The appeal deserved to be restored and decided afresh on merits rather than being summarily rejected.
  • No coercive recovery ought to be pursued while the matter remained pending before the appellate forum.

Respondent's Arguments

  • Learned counsel for the Revenue had no objection to the matter being remanded to the Appellate Authority for a fresh decision on merits.
  • The Revenue agreed that any ground of delay would not be pressed and that the appeal would be decided on merits, with no coercive steps taken meanwhile.

Court Order/Findings

  • Noting the Revenue's concession, the Division Bench recorded the statement and disposed of the petition on mutually agreeable terms.
  • The Court quashed and set aside the appellate order dated 27.10.2021 and directed that the appeal be restored to its original file and number before the Additional Commissioner of State Taxes (Appeal), Purnea Division.
  • The petitioner's undertaking that 10% of the demand already stood deposited was accepted as satisfying the pre-condition for hearing the appeal, and the petitioner was further directed to deposit an additional 20% of the demand within four weeks.
  • Bank accounts attached in connection with the proceedings were directed to be de-frozen immediately, and the Appellate Authority was directed to condone the delay in filing the appeal.

Important Clarification

  • A cryptic, non-speaking appellate order rejecting a GST appeal — one that does not engage with the grounds urged — is liable to be quashed for violating natural justice, irrespective of the delay ground on which it was passed.
  • Where the Revenue itself concedes that delay ought not to bar an appeal, courts will readily direct condonation and a decision on merits rather than leaving the assessee remediless on a technicality.

Sections Involved

  • Section 107, BGST/CGST Act, 2017 — appeal to Appellate Authority against orders of adjudicating authority.
  • Rule 142, BGST Rules, 2017 — issuance of summary of demand in Form GST DRC-07.
  • Article 226, Constitution of India — writ jurisdiction invoked against the non-speaking appellate order.

Decision – In Favour of

Disposed of with directions, in favour of the Assessee — the non-speaking appellate rejection was quashed, the appeal restored and delay condoned, subject to a combined 30% pre-deposit, with no opinion expressed on the merits of the underlying tax demand.

Related Case Laws

No related case laws are available on this site at present for cross-reference on this specific point.

Case Details

  • Court: Patna High Court
  • Case No.: CWJC No.4763 of 2022
  • Coram: Hon'ble the Chief Justice (Sanjay Karol, CJ) and Hon'ble Mr. Justice S. Kumar
  • Date of Order: 05.04.2022

Link to Download the Order

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