Vinod Metal vs State of Maharashtra

The amount deposited under Protest is adjustable as a Pre-Deposit for Appeal U/s 107. Any Procedural/Technical requirement cannot deny Appeal Remedy which is Substantive Provision as per Law Any procedural rule or technical requirement cannot defeat the availability of a remedy of an appeal, made available to the assessee under a substantive statutory provision nor can such remedy be rendered illusory. An amount deposited under Section 73(5) is not an amount, which is deposited in pursuance of any demand or any assessment order. It is certainly a voluntary deposit and which is subject to all the contentions of the assessee. Further, such deposit would be accounted in the event of any the liability of the assessee to pay tax, and would be integral to the assessment. Thus, when it comes to compliance with mandatory payment of the tax, being a condition precedent as per S. 107(6). The voluntary deposit (S. 73(5)) as made under protest by the petitioner cannot be excluded from consideration for the purpose of compliance as mandated by S. 107(6).

The Petitioner in these proceedings under Article 226 of the Constitution of India has approached this Court making a grievance in regard to the functionality of the GSTN Portal, which according to the Petitioner, has prevented it from lodging/filing of a statutory appeal under the provisions of Section 107 of the Central Goods and Services Tax Act, 2017 (for short “the CGST Act”), in a situation wherein the Petitioner had intended to take the benefit of the voluntary deposit of the CGST made by the Petitioner under the provisions of sub-section (5) of Section 73 of the CGST Act, in relation to the compliance of the provisions of sub-section (6) of Section 107 of the CGST Act. Such provision mandates that no appeal shall be filed under sub-section (1) of Section 107 of the CGST Act, unless the appellant has paid in full such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as admitted by him; and a sum equal to ten per cent of the remaining amount of tax in dispute arising from the said order, in relation to which an appeal is intended to be preferred.

2. To appreciate the contentions as urged by the Petitioner, it would be necessary to note the provisions of Section 73 of the CGST Act, which provide for determination of tax not paid or short paid or erroneously refunded, etc. and the provisions of Section 107 of the CGST Act, which provides for appeals to appellate authority. The said provisions reads thus:

“Section 73-Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for any reason other than fraud or any wilful- misstatement or suppression of facts. –

(1) Where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded, or where input tax credit has been wrongly availed or utilised for any reason, other than the reason of fraud or any wilful-misstatement or suppression of facts to evade tax, he shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilised input tax credit, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under section 50 and a penalty leviable under the provisions of this Act or the rules made thereunder.

(2) The proper officer shall issue the notice under sub-section (1) at least three months prior to the time limit specified in sub-section (10) for issuance of order.

(3) Where a notice has been issued for any period under sub-section (1), the proper officer may serve a statement, containing the details of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for such periods other than those covered under sub-section (1), on the person chargeable with tax.

(4) The service of such statement shall be deemed to be service of notice on such person under sub-section (1), subject to the condition that the grounds relied upon for such tax periods other than those covered under sub-section (1) are the same as are mentioned in the earlier notice.

(5) The person chargeable with tax may, before service of notice under sub-section (1) or, as the case may be, the statement under sub-section (3), pay the amount of tax along with interest payable thereon under section 50 on the basis of his own ascertainment of such tax or the tax as ascertained by the proper officer and inform the proper officer in writing of such payment.

(6) The proper officer, on receipt of such information, shall not serve any notice under sub-section (1) or, as the case may be, the statement under sub-section (3), in respect of the tax so paid or any penalty payable under the provisions of this Act or the rules made thereunder.

(7) Where the proper officer is of the opinion that the amount paid under sub-section (5) falls short of the amount actually payable, he shall proceed to issue the notice as provided for in sub-section (1) in respect of such amount which falls short of the amount actually payable.

(8) Where any person chargeable with tax under sub-section (1) or sub-section (3) pays the said tax along with interest payable under section 50 within thirty days of issue of show cause notice, no penalty shall be payable and all proceedings in respect of the said notice shall be deemed to be concluded.

(9) The proper officer shall, after considering the representation, if any, made by person chargeable with tax, determine the amount of tax, interest and a penalty equivalent to ten per cent. of tax or ten thousand rupees, whichever is higher, due from such person and issue an order.

(10) The proper officer shall issue the order under sub-section (9) within three years from the due date for furnishing of annual return for the financial year to which the tax not paid or short paid or input tax credit wrongly availed or utilised relates to or within three years from the date of erroneous refund.

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Vinod Metal

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