Facts of the Case

The Petitioner, M/s Prakash Sinha, proprietor of Prakash Vigyapan and registered under GSTIN 10ARXPS0896E2ZD, had its claim for input tax credit rejected by order dated 31.01.2020 and consequential order dated 06.03.2020, along with a summary of order in Form GST DRC-07 dated 07.03.2020, solely on the ground that the return under Section 39 for the tax period July 2017 to March 2018 was filed beyond 10.04.2019. The Petitioner's subsequent appeal (ARN AD100820000578K) was rejected by the Additional Commissioner, State Taxes, Western Block, Muzaffarpur, by order dated 18.12.2020, solely on the ground that the certified copy of the impugned order had not been submitted within time, without passing a speaking order or hearing the appeal on merits. The Petitioner's bank account was thereafter attached by orders dated 09.01.2021 and 18.02.2021.

Issues Involved

  1. Whether an appellate order rejecting a GST appeal solely for delay in filing a certified copy, without a speaking order, could be sustained.
  2. Whether the delay stood explained in light of the Supreme Court's order extending limitation during the Covid-19 pandemic.

Petitioner's Arguments

  • The delay in submission of the certified copy stood explained on account of Covid-19 restrictions.
  • The certified copy of the assessing officer's order was, in fact, placed on record of the appeal while it was pending before the authority.
  • Sought quashing of the input tax credit rejection order, the appellate rejection, and the bank attachment.

Respondent's Arguments

  • Counsel for the Revenue appeared and did not press any objection to the record placed by the Petitioner regarding the delay or the pendency of the certified copy before the appellate authority.

Court Order / Findings

  • The Court held that the delay stood sufficiently explained on account of Covid-19 restrictions, applying the Supreme Court's order in Suo Motu Writ Petition (Civil) No.3 of 2020, In Re: Cognizance for Extension of Limitation, and subsequent orders.
  • Quashed and set aside the appellate order dated 18.12.2020, and restored the appeal to its original file and number.
  • Directed that the appeal be decided on merits, subject to the condition that 10% of the demand — the statutory pre-deposit for hearing of the appeal — stands deposited, to be completed before the next date if not already done.
  • The appellate authority was directed to comply with the principles of natural justice, afford opportunity of hearing, and pass a fresh, reasoned speaking order within two months of the Petitioner's appearance; no coercive steps were to be taken against the Petitioner meanwhile.
  • The Court expressed no opinion on the merits of the underlying input tax credit dispute, leaving all issues open.

Important Clarification

  • An appellate authority cannot reject a GST appeal solely on the technical ground of delay in filing a certified copy without passing a speaking order addressing the delay and the merits.
  • The Supreme Court's Covid-19 limitation-extension order applies to explain such procedural delays in GST appellate proceedings, and courts will restore appeals wrongly rejected on that ground.
  • Restoration on this basis does not amount to a finding on the underlying merits of the input tax credit dispute, which remains open for the appellate authority to decide.

Sections Involved

  • Section 39, Central Goods and Services Tax Act, 2017 — governs furnishing of returns; the original rejection of input tax credit was founded on a return filed beyond the due date under this provision.
  • Section 107, Central Goods and Services Tax Act, 2017 — governs appeals against orders of the proper officer, including procedural requirements such as filing a certified copy of the order appealed against.
  • Form GST DRC-07 — the summary of the order specifying the demand, which formed part of the challenge.

Decision – In Favour of

Disposed of with directions, in favour of the Assessee — the appellate order was quashed and the appeal restored for a fresh decision on merits within two months, with no finding recorded on the underlying input tax credit dispute.

Case Details

  • Court: High Court of Judicature at Patna
  • Case No.: Civil Writ Jurisdiction Case No.2845 of 2022
  • Coram: Chief Justice Sanjay Karol and Justice S. Kumar
  • Date of Order: 21.02.2022
  • Parties: M/s Prakash Sinha, Proprietor Prakash Vigyapan, vs Union of India & Ors.

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