Chetankumar Jasraj Palgota HUF Chamunda Bulion Vs State of Maharashtra Thr. Agp and Ors.

¶1

10-WP.14095.2022.doc

¶2

TAUSEEF LAIQUEE FAROOQUI

¶3

Digitally signed by TAUSEEF LAIQUEE FAROOQUI Date: 2023.12.19 14:49:40 +0530

¶4

Tauseef

¶5

IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION

¶6

WRIT PETITION NO.14095 OF 2022

¶7

Chetankumar Jasraj Palgota HUF...Petitioner

¶8

Versus

¶9

State of Maharashtra & Ors....Respondents

¶10

WITH

¶11

INTERIM APPLICATION NO.464 OF 2023

¶12

IN
WRIT PETITION NO.14095 OF 2022

¶13

Chetankumar Jasraj Palgota HUF...Applicant/Petitioner
Versus
State of Maharashtra & Ors....Respondents

¶14

********

¶15

Mr. Brijesh Pathak for the Petitioner.

¶16

Ms. Shruti D. Vyas, Addl. G.P. a/w. Ms. P. N. Diwan, AGP for Respondent
(State).

¶17

********

¶18

CORAM : G. S. KULKARNI,
JITENDRA JAIN, J.J.

¶19

DATE : 4th DECEMBER, 2023.

¶20

P.C.

¶21

1.By this petition under Article 226 of the Constitution of India,

¶22

the Petitioner has prayed for various relief, however at the time of the
hearing the Petitioner has pressed prayer clause (b) which reads thus:-

¶23

“(b) Issue a writ in the nature of certiorari or any other appropriate writ
or order thereby quashing the impugned Order dated 19.04.2022,
Exhibit A, issued by the Respondent No.3 along with consequential
reliefs;”

¶24

1 of 8

¶25

Tauseef

¶26

10-WP.14095.2022.doc

¶27

2.The Petitioner has thereafter also filed an interim application

¶28

praying for the following relief:-

¶29

“a. direct the Respondents and their subordinates to forthwith
consider the deposits made in terms of Challans at Exhibit B, as sufficient
compliance of section 107 (6) of the MGST Act, and accept the Appeal
filed by the Applicant on 10.10.2022, Exhibit E;”

¶30

3.We propose to dispose of the interim application and the writ
petition by this common order since the issues are related.

¶31

4.The Petitioner is carrying on business of bullion trading in the
name of Chamunda Bullion. It is the contention of the Petitioner that on
19th April 2022 Respondent No.3 had blocked the amount of Input Tax
Credit (ITC) lying in the electronic credit ledger. During the course of
the search, a statement of the Petitioner was recorded. The Petitioner
deposited under protest a sum of Rs.1 Crore on 25th April 2022 and 26th
April 2022.

¶32

5.A show cause notice was thereafter issued to the Petitioner, on
following which on 29th August 2022, an Order-in-Original (O-I-O)
came to be passed, raising a tax demand of Rs.7,32,73,629/- against the
Petitioner for the period 2021-22. The Petitioner filed an appeal against
the said order and requested the Appellate-Authority to adjust the sum
of Rs.1 Crore deposited under protest on 25th April 2022 and 26th April
2022 as a pre-deposit for the appeal proposed to be filed. The
Petitioner’s request of adjustment towards the pre-deposit under Section

¶33

2 of 8

¶34

Tauseef 10-WP.14095.2022.doc

¶35

107(6) to file an appeal came to be rejected by the Appellate-Authority.
The Petitioner being aggrieved by such order passed by the Appellate-
Authority has listed the interim application praying for a direction to
the Respondents to consider the deposit of Rs.1 Crore as sufficient
compliance of Section 107(6) of the CGST/MGST Act and for a further
direction to accept the appeal filed by the Applicant/Petitioner.

¶36

6.The Petitioner submits that the sum of Rs.1 Crore was paid
“under protest” without their being any demand on the day when the
deposit was so made. The Petitioner submits that the Respondents are
not justified in retaining the same and further demanding a sum equal
to 10% as pre-deposit for filing an appeal without adjusting the said
deposit. The Petitioner has placed reliance on the decision of this Bench
in the case of Vinod Metal Vs. State of Maharashtra1to contend that in

¶37

an identical fact situation, this Court has held that the deposit made

¶38

“under protest” should be considered as pre-deposit under Section
107(6) of the CGST Act. The Petitioner further contended that insofar
as the blocking of credit is concerned, the period of one year under
Section 83 has expired and, therefore, by operation of law, the said
blocking ceases to have effect as per Section 83(2) of the CGST/MGST
Act.

¶39

1 (2023) 9 Centax 178 (Bom.)

¶40

3 of 8

¶41

Tauseef 10-WP.14095.2022.doc

¶42

7.Per contra, the Respondents would contend that the amount
of deposit of Rs.1 Crore under protest is a voluntary deposit and,
therefore, the same cannot be permitted to be treated as pre-deposit
under Section 107(6) of the CGST/MGST Act. The Respondents would
further contend that this deposit was made voluntarily and the order
sought to be challenged in appeal is under Section 74 and, therefore,
the decision in the case of Vinod Metal (supra) is not applicable.
Insofar as the blocking of credit is concerned, the Respondents state that
they have not blocked the credit and, therefore, the prayer made by the
Petitioner is misconceived.

¶43

8.We have heard learned counsel for the Petitioner and learned

¶44

counsel for the Respondents. With their assistance we have perused the
records of the writ petition and the interim application.

¶45

9.Insofar as the deposit of Rs.1 Crore on 25th April 2022 and
26th April 2022 is concerned, the said deposit has been made “under
protest” as evident from the challans. On the date of the deposit, there
was no demand against the Petitioner, therefore, the retention of the
said amount by the Respondents is without authority of law inasmuch
as the Respondents can retain only that amount which is against the
demand raised and admittedly on the date of the deposit, there was no
such demand. Subsequently, an Order in Original was passed on 29th

¶46

4 of 8

¶47

Tauseef 10-WP.14095.2022.doc

¶48

August 2022 and a demand was raised by the Respondents. The
Petitioner has challenged the said order by filing an appeal and
requested the Appellate-Authority to adjust the said sum of Rs.1 Crore
as compliance under Section 107(6) of the CGST/MGST Act.

¶49

10.In our view, the prayer made for adjustment as pre-deposit for
maintainability of appeal by the Petitioner is justified and same is
squarely covered by the decision of this Bench in the case of Vinod
Metal (supra), wherein in a similar situation, this Court has observed
that voluntary deposit made “under protest” cannot be excluded from
considering it as a part of pre-deposit for filing an appeal before the
Appellate Authority. The distinction sought to be made out by the
Respondents, that the order in the case of the Petitioner is passed under
Section 74, whereas in the case of Vinod Metal (supra), the order was
passed under Section 73(5) is not tenable. The issue before us is not
that under which section the deposit order was passed, but as to
whether a deposit made “under protest” without their being any
demand can be retained and whether the request of the Petitioner to
treat such amount as a pre-deposit for the purpose of Section 107(6) of
the CGST/MGST Act needs to be granted. In our view, the said issue is
squarely covered by the decision in the case of Vinod Metal (supra)in
which the Court as observed thus:-

¶50

5 of 8

¶51

Tauseef

¶52

10-WP.14095.2022.doc

¶53

“7.We have considered the rival submissions. The question is whether
the amount as deposited by the Petitioner anterior to the filing of the
appeal under the provisions of section 73(5) of the CGST Act can be
taken into consideration for the purpose of compliance of the
requirement of pre-deposit under Section 107(6) of the CGST Act.

¶54

8.In our view, there is much substance in the contentions as urged on
behalf of the Petitioner. There cannot be two opinions, that 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.
The interpretation of the provisions need to be made to recognise the
intention of the legislature, which is to aid access to justice, which itself
is a fundamental right guaranteed under the Constitution. When it
comes to right of an appeal, as guaranteed by a statutory provision, such
right needs to be made effective and meaningful. It cannot be frustrated
by shackles of complex procedural formalities.

¶55

9.In the present case, the Petitioner is in no manner disputing that
the Petitioner is required to comply with the provisions of sub-section (7)
of Section 107 of the CGST Act, in filing the appeal. In other words, the
Petitioner is ready and willing to make the payment/deposit of the tax as
per clauses (a) and (b) of sub-section (6) of section 107 of the CGST Act.
However, the question raised by the Petitioner is that for fulfilment of
such condition, the amount of tax, which is voluntarily deposited by the
Petitioner, under protest under sub-section (5) of section 73 of the CGST
Act, by permitted to be reckoned for the purposes of a pre-deposit for
compliance of sub-section (6) of section 107 of the CGST Act. In our
opinion, such request for the Petitioner is not something, which is
opposed to law, inasmuch as, on a holistic reading of section 73 of the
CGST Act, it can be said that an amount deposited under sub-section (5)
section 73 of the CGST Act 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. Also such deposit would be accounted in the event of any the
liability of the assessee to pay tax, and would be integral to the

¶56

6 of 8

¶57

Tauseef

¶58

10-WP.14095.2022.doc

¶59

assessment. Thus, when it comes to the compliance of sub-section (6) of
section 107 of the CGST Act, namely, the mandatory payment of the tax,
being a condition precedent, mandated in terms of the provisions of sub-
sections (6)(a) and (6)(b) of section 107 of the CGST Act, in our opinion
the principle as laid down in Supreme Court in VVF (India) Ltd. (supra)
would become applicable considering that the provisions of the CGST Act
on pre-deposit are not too different from the provisions of the MVAT act,
which fell for consideration of the Supreme Court.”

¶60

11.Insofar as the prayer in regard to the blocking of input tax
credit is concerned, the Respondents have stated that they have not
blocked the input tax credit and, therefore, the issue does not arise for
our consideration in the light of the said statement made by the
Respondents. In any view of the matter, the input tax credit is
contended to have been blocked on 19th April 2022 and the period of
one year expires on 19th April 2023, hence, by operation of law as per
Section 83(2) of the CGST/MGST Act, the said attachment ceases to
exists.

¶61

12. In view thereof, we pass the following order:-

¶62

(i). The Respondents are directed to treat sum of Rs.1 Crore

¶63

as pre-deposit for the purpose of Section 107(6) of the
CGST/MGST Act and the appeal be decided on merits.

¶64

(ii). The input tax credit alleged to have been blocked vide
order dated 19th April 2022 stands defreezed by
operation of law.

¶65

7 of 8

¶66

Tauseef 10-WP.14095.2022.doc

¶67

(iii). The Appellate-Authority shall decide the appeal filed by
the Petitioner within a period of four months from the
date of uploading of the present order.

¶68

(iv).Petition is disposed of in the aforesaid terms.

¶69

(v).In view of above writ petition, Interim Application No.464 of 2023 would also disposed of.

¶70

(vi).All contentions of the parties are expressly kept open.

¶71

(vi). No order as to costs.

¶72

[JITENDRA JAIN, J.] [G. S. KULKARNI, J.]

¶73

8 of 8

Chetankumar Jasraj Palgota HUF Chamunda Bulion v. State of Maharashtra Thr. Agp and Ors.

Case brief

What is this about?

What did the court decide?

Chetankumar Jasraj Palgota HUF Chamunda Bulion v. State of Maharashtra Thr. Agp and Ors.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Pina Pankaj Shah Vs Securities and Exchange Board of India

Ashok Dayabhai Shah and 16 Ors. Vs Securities and Exchange Board of India and 8 Ors.

Sanjay Shridhar Bendre and Ors. Vs State of Maharashtra through Secretary and Ors.

T.v.Patel Pvt. Ltd. Vs the Dy. C.I.T., Special Range 14, Mumbai

Sweta Distributors Private Limited Vs the Union of India Thr. Revenue Secretary and Ors.

Chetankumar Jasraj Palgota (Huf) Vs State of Maharashtra and Ors.