Page No.# 1/ vs The State Of Assam And 2 Ors on 20 September, 2024

GST Judgment Summary

Case Title: TNS Express Pvt Ltd & Anr vs The State Of Assam And 2 Ors
Case No.: WP(C)/3392/2024 & WP(C)/3417/2024
Court: The Gauhati High Court
Date of Judgment: 20 September, 2024
Bench: Hon'ble Mr. Justice Devashis Baruah

1. Outcome

The writ petitions were disposed of in favour of the Petitioners. The Court directed the Respondent authorities to permit the Petitioners to file their statutory appeals against the orders passed under Section 129(3) of the Assam GST Act, 2017, within a specified timeframe, either through the online portal or manually, without raising the issue of limitation.

2. Core Issue

Whether a taxpayer's statutory right to appeal under Section 107 of the GST Act is extinguished if they pay the entire demand of tax and penalty raised in an order under Section 129(3), especially when such payment was made under protest to secure the release of detained goods and the appeal could not be filed due to a technical glitch on the GST portal.

3. Key Facts

• Two Petitions, Similar Facts: The case involves two writ petitions filed by TNS Express Pvt Ltd concerning two separate incidents of vehicle interception and detention of goods (Pan Masala) by the GST authorities.
• Detention and Demand: In both cases, proceedings were initiated under Section 129(3) of the Assam GST Act, 2017. Orders were passed demanding payment of tax and penalty (Rs. 16,35,840/- in the first case and Rs. 16,08,192/- in the second).
• Payment Under Protest: To secure the release of the goods, which the petitioner claimed were perishable, they paid the entire demanded amounts under protest. The authorities acknowledged the payments and released the goods.
• Inability to File Appeal: When the Petitioners attempted to file statutory appeals against the Section 129(3) orders, the GST portal displayed an alert notification stating that the appeal could only be filed after complete payment of taxes, despite the full payment having been made.
• Unresponsive Authorities: The Petitioners sent multiple communications to the authorities regarding this technical glitch, but no remedial action was taken. This prevented them from exercising their right to appeal, leading them to file the writ petitions.

4. Arguments

• Petitioners' Arguments:

  • They were wrongfully deprived of their valuable statutory right to file an appeal due to a technical glitch on the respondent's portal.
  • The full payment of the demand was made under protest solely to secure the release of their goods and did not imply an admission of liability.
  • The authorities failed to act on their representations to resolve the portal issue, which was beyond the petitioners' control.

• Respondents' Arguments (Tax Department):

  • They invoked Section 129(5) of the Assam GST Act, 2017.
  • Their primary contention was that since the petitioner had paid the entire demanded amount in full, the proceedings initiated under the Section 129(3) notice are "deemed to have been concluded."
  • Consequently, there were no pending proceedings left to appeal against.

5. Court’s Reasoning

• Right to Appeal is Statutory: The Court began by reaffirming the statutory right to appeal available under Section 107 of the CGST Act to any person aggrieved by an order.
• Payment Doesn't Bar Appeal: The Court found no provision in either Section 107 or Section 129 that bars the filing of an appeal if the entire demanded amount is paid. The pre-deposit condition for an appeal under Section 129(3) is a payment of 25% of the penalty; paying 100% of the demand more than satisfies this condition.
• Interpretation of Section 129(5): The Court critically analyzed Section 129(5), which states that upon payment, proceedings in respect of the notice shall be deemed concluded. The Court made a crucial distinction, noting that the section refers to the conclusion of proceedings related to the "notice" issued under sub-section (3), not the "order" passed under it.
• Conclusion of Reasoning: The Court opined that Section 129(5) would likely apply where a taxpayer pays the full amount after receiving the show-cause notice, thereby concluding the matter before a final order is passed. It does not, however, take away the right to challenge a final order after it has been passed, even if the payment is made subsequently.
• Fault of the Respondents: The Court concluded that the Petitioners were unable to file their appeals due to the fault of the Respondent authorities, specifically the unresolved technical glitch on the GST portal. Therefore, the Petitioners cannot be penalized for this failure.

6. Statutory References

• Assam Goods and Services Tax Act, 2017 (State Act):
  • Section 129(1), 129(3), 129(5)
• Central Goods and Services Tax Act, 2017 (CGST Act):
  • Section 107, 107(1), 107(6) and its proviso

7. Precedents Cited

None. The judgment was based on the interpretation of the statutory provisions.