Facts of the Case

The petitioner, M/s CVK Technologies Private Limited, a company engaged in business at Malkajgiri, Hyderabad, had its GST appeal against an original assessment rejected by the Additional Commissioner (Appeals-II), GST and Central Tax, by Order-in-Appeal No. HYD-GST-MD-AP2-042-23-24 dated 20.07.2023 in Appeal No.52 of 2023 (MD) GST, on the short ground that the petitioner had failed to enclose proof of tax payment with the appeal memorandum. The petitioner approached the Telangana High Court by writ petition, since the GST Appellate Tribunal under Section 112 of the CGST Act had not yet been constituted, leaving no alternative statutory forum available.

Issues Involved

  1. Whether the appellate authority was justified in rejecting the appeal solely because the proof of tax payment (challan) could not be enclosed with the memo of appeal.
  2. Whether the matter warranted remand for fresh consideration on merits given the petitioner's claim of continuity of business and tax payments.

Petitioner's Arguments

  • The petitioner submitted that although it possessed proof of tax payment, it could not be enclosed with the appeal memo, leading the appellate authority to reject the appeal purely on this technical short point without examining the substance.
  • It was contended that the petitioner had been regular in payment of dues to the department, but due to oversight the copy of challan could not be produced earlier; a copy was subsequently produced along with the writ petition itself.
  • Reliance was placed on the Delhi High Court ruling in Kritika Agarwal v. Union of India, that the measure of cancellation/adverse action must be exercised with circumspection and only where necessary, and on a Division Bench ruling of the same High Court in W.P.No.36174 of 2022 remanding a similar matter for fresh consideration.
  • It was also submitted that although the entire tax, interest and late fees had been paid, the amount could not be uploaded to the portal since it stood closed.

Respondent's Arguments

  • The Department's counsel appeared but did not seriously dispute the facts; no substantive defence of the appellate authority's rejection on the technical ground was pressed beyond supporting the impugned order.

Court Order / Findings

  • The Court noted that the petitioner had produced copies of challans reflecting continuity of business and tax payments, and that the only lapse was the inability to enclose the challan copy with the appeal memo before the Appellate Authority.
  • The Court held that the petitioner had made out a good case warranting interference to the extent of confirming the payment status, given that the challan had since been enclosed with the writ petition.
  • The Order-in-Appeal dated 20.07.2023 was accordingly set aside and the matter remitted to the appellate authority to reconsider the appeal on its own merits after due verification of the challan copy.
  • The respondent authority was directed to take a decision on the appeal at the earliest, preferably within a period of four weeks.
  • The writ petition was allowed without costs.

Important Clarification

  • A GST appeal rejected purely on the technical ground of a missing tax-payment challan — without examining the substance of continuity of business and payment — can be remanded for fresh verification once the assessee produces the challan, rather than being treated as a final bar.
  • Pending constitution of the GST Appellate Tribunal under Section 112, writ courts continue to entertain such challenges as the only available remedy.

Sections Involved

  • Section 107, Central Goods and Services Tax Act, 2017 – first appellate remedy against an assessment order, invoked here.
  • Section 112, Central Goods and Services Tax Act, 2017 – provides for a further appeal to the GST Appellate Tribunal, non-constitution of which drove the petitioner to approach the High Court.

Decision – In Favour of

The decision is in favour of the Assessee — the appeal-rejection order was set aside and the matter remanded for fresh consideration of the appeal on merits after verifying the challan.

Case Details

Court: High Court for the State of Telangana at Hyderabad
Case No.: Writ Petition No. 22173 of 2023
Coram: Justice P. Sam Koshy and Justice Laxmi Narayana Alishetty
Date of Order: 17.08.2023

Link to Download the Order

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