Facts of the Case

M/S Arohi Enterprises, a GST-registered dealer engaged in the business of tobacco leaves, challenged a summary order issued under Form GST DRC-07 dated 02.07.2023 and a penalty order dated the same day under Form GST MOV-09, along with a prayer for release of goods and the vehicle (registration No. GJ34T5669) detained by the department. The petitioner explained that although it had already deposited the amount required to file a statutory appeal, the GST portal was refusing to accept the appeal because the proceedings had erroneously been initiated against the driver of the vehicle rather than against the petitioner, even though both the buyer and supplier were duly registered under the CGST Act. A rectification application dated 06.07.2023 remained pending.

Issues Involved

  1. Whether the petitioner should be permitted to file a statutory appeal despite the GST portal's technical inability to register an appeal against proceedings initiated in the driver's name.
  2. Whether the amount already deposited by the petitioner could be treated as satisfying the pre-deposit requirement for the appeal.
  3. Whether the point of limitation should be waived given the portal-driven procedural difficulty.

Petitioner's Arguments

  • The proceedings were erroneously initiated against the driver instead of the petitioner-firm despite both buyer and supplier being duly registered under the CGST Act, 2017; the portal accordingly would not accept an appeal in the petitioner's name; a rectification application was pending, and the amount already deposited should be adjusted against the pre-deposit for the appeal.

Respondent's Arguments

  • The revenue's counsel fairly agreed that the amount already deposited by the petitioner should be adjusted against the amount required for filing the appeal, and that necessary arrangements would be made for entertaining the appeal.

Court Order / Findings

  • In view of the fair submissions of both sides, the Court disposed of the petition, permitting the petitioner to file an appeal within three weeks, directing the Appellate Authority to consider the claim on merits in accordance with law while ignoring the point of limitation.
  • Since the goods were perishable in nature, the Appellate Authority was directed to take prompt steps to decide the appeal, and any interim-relief application filed within ten days was to be considered expeditiously.

Important Clarification

The Court did not decide the substantive dispute over the tax/penalty demand or the correctness of detaining the vehicle -- it only cleared the procedural logjam so that a statutory appeal could actually be filed and heard, given that the erroneous naming of the driver (rather than the registered dealer) in the GST DRC-07/MOV-09 proceedings had created a technical barrier on the portal.

Sections Involved

  • Central Goods and Services Tax Act, 2017 – Form GST DRC-07 (summary of order), Form GST MOV-09 (penalty order for detained goods/conveyance), appeal provisions (Section 107)

Decision – In Favour of

Petitioner (M/S Arohi Enterprises) – permitted to file an appeal within three weeks, with limitation waived and the deposited amount adjusted towards pre-deposit; the underlying tax/penalty demand remains to be decided by the Appellate Authority.

Case Details

Court: High Court of Judicature at Allahabad
Case Number: Writ Tax No. 918 of 2023
Coram: Chief Justice Pritinker Diwaker and Justice Ashutosh Srivastava
Date of Order: 27 July 2023

Link to Download the Order

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