In a recent ruling in the matter of Delphi World Money Ltd, Mumbai v/s The Union of India through the Ministry of Law & Justice, Mumbai & Others, the Bombay High Court quashed an Order-in-Appeal passed by Respondent No. 2, which had dismissed a petitioner's appeal. The appeal was dismissed on two primary grounds: non-compliance with the mandatory pre-deposit requirement under Section 107(6) of the CGST Act, 2017, and failure to submit valid documents, such as a Board resolution, to establish the appellant's authorized signatory status.
Pre-Deposit Compliance:
The first ground for dismissal was the petitioner's alleged failure to submit proof of the pre-deposit payment required for filing an appeal. According to Section 107(6) of the CGST Act, a mandatory pre-deposit of 10% of the disputed tax amount must be paid before an appeal can be filed. However, the petitioner claimed to have made the pre-deposit of Rs. 4,42,55,474/- in two separate payments — one from the Electronic Credit Ledger and the other from the Electronic Cash Ledger, both made on 12th March 2024.
The court reviewed the record and confirmed that the payment had indeed been made. It noted that the appeal’s memorandum (Form APL-01) clearly indicated the pre-deposit amount. Additionally, screenshots from the GSTN portal provided further proof, showing payments from both the Electronic Credit and Cash Ledgers. Despite this, the Appellate Authority did not acknowledge the pre-deposit, thus failing to provide the petitioner an opportunity to clarify the payment if there were any doubts.
In similar cases, the Bombay High Court had previously remanded matters to the Appellate Authority for de novo (fresh) consideration when such issues arose. For instance, in Bytedance (India) Technology Pvt. Ltd v. Union of India (Writ Petition (L) No. 23724 of 2024), the court set aside an order that had dismissed the appeal due to a lack of pre-deposit proof, as evidence of payment was available. The Court emphasized that if doubts regarding the payment existed, the Appellate Authority should have allowed the petitioner to provide further clarification.
Authorized Signatory Issues:
The second ground for dismissal related to the absence of a Board resolution confirming the petitioner’s authorized signatory for the appeal. Respondent No. 2 argued that the petitioner had failed to submit such a resolution. However, the petitioner pointed out that the authorized signatory, Mr. Deepak Kokate, was listed on the GSTN portal as an authorized signatory, and no additional documents were requested or communicated by the Appellate Authority at the time of the personal hearing.
The Court observed that had the Appellate Authority reviewed the GSTN portal, it would have found that Mr. Kokate was duly authorized. In a previous case, Tata Consumer Products Ltd. v. Union of India (Writ Petition No. 11298 of 2024), the Court also quashed an order where the Appellate Authority had dismissed an appeal based on similar concerns regarding the authorized signatory. The Court held that the authority should have clarified any doubts directly with the petitioner, instead of dismissing the appeal.
Court’s Decision:
Given the procedural lapses and the failure of the Appellate Authority to provide the petitioner a chance to address concerns, the Court quashed the impugned order and remanded the matter to Respondent No. 2 for fresh consideration. The Court instructed that a personal hearing be granted to the petitioner, and a reasoned order be passed by 31st December 2024. It also ensured that the petitioner would be given adequate notice of the hearing, at least five working days in advance.
Conclusion:
This ruling underscores the importance of procedural fairness and thorough consideration of evidence in administrative matters. It reiterates that authorities must offer parties an opportunity to clarify any concerns, particularly when evidence of compliance is already available. The decision to quash and remand the case serves as a reminder of the need for careful review by authorities and their duty to provide clear, reasoned decisions.
COMPANIES ACT, 2013
CENTRAL GOODS AND SERVICES TAX ACT, 2017
