GST appeal restored and bank account release directed due to marginal delay, portal access difficulty, and non-constituted appellate tribunal.

GST appeal restored and bank account release directed due to marginal delay, portal access difficulty, and non-constituted appellate tribunal.

Issue:

When an assessee’s appeal against an assessment order under Section 73 of the Central Goods and Services Tax Act, 2017 (CGST Act, 2017), is dismissed by the appellate authority solely due to a marginal delay (47 days), and the assessee explains the delay was due to difficulty in accessing the Show Cause Notice (SCN) from the portal, compounded by the non-constitution of the Goods and Services Tax Appellate Tribunal (GSTAT), whether the High Court should remand the matter for adjudication on merits and direct the release of an attached bank account.

Facts:

• The assessee’s appeal against an assessment order (passed under Section 73, i.e., not involving fraud, etc.) was dismissed by the appellate authority.
• The sole reason for dismissal was a delay of 47 days in filing the appeal.
• The assessee explained that the delay occurred because they had difficulty accessing the Show Cause Notice (SCN) from the GST portal, which impacted their knowledge of the assessment proceedings.
• The assessee approached the High Court because the Goods and Services Tax Appellate Tribunal (GSTAT), the next appellate forum, was not yet constituted, leaving them without a statutory remedy.
• It is also implied that a bank account of the assessee might have been attached (as there’s a direction regarding its release).
• A pre-deposit had already been paid by the assessee (likely 10% for the first appeal).

Decision:

The court held in favor of the assessee.

1. Considering the “marginal delay” and the absence of a constituted appellate tribunal (GSTAT), the matter was remanded to the appellate authority for adjudication on merits.
2. A specific direction was given to the appellate authority to decide any application for the release of an attached bank account within one week, if such an application was made, taking into account the pre-deposit already paid by the assessee.
3. The appeal was directed to be disposed of within six weeks by the appellate authority. The writ petition was disposed of accordingly.

Key Takeaways:

• Marginal Delay & Condonation: Courts are generally lenient in condoning “marginal” delays, especially when a reasonable cause (like difficulty in accessing crucial communications from the portal) is demonstrated. The High Court, exercising its writ jurisdiction, often steps in when the lower appellate authority has taken an overly strict view on limitation, leading to denial of justice on technical grounds.
• Non-Constitution of Appellate Tribunal (GSTAT): This is a critical factor. The High Court actively intervenes when a statutory appellate forum is unavailable, ensuring that the assessee’s right to appeal is not frustrated. This is a common ground for High Courts to entertain writ petitions challenging orders that would otherwise go to the GSTAT.
• Denial of Effective Opportunity: Difficulty in accessing the SCN from the portal directly impacts the assessee’s knowledge of the demand and their ability to prepare and file a timely appeal, thereby violating the spirit of natural justice.
• Release of Attached Bank Account: The direction to decide the bank account release application quickly highlights the court’s concern for business continuity. Attachment of bank accounts is a drastic measure, and if an appeal is being heard on merits (and a pre-deposit is made), the continued attachment might be disproportionate.
• Expeditious Disposal: The direction to dispose of the appeal within six weeks underscores the court’s commitment to speedy justice and resolving disputes efficiently.
• Balancing Act: The court balanced the revenue’s interest (by noting the delay) with the assessee’s fundamental right to appeal and natural justice, leading to a pragmatic solution that restores the appeal and addresses related hardships.
• “In favour of assessee”: This outcome is strongly in favor of the assessee as their appeal, previously dismissed, is now back on track for a merits-based decision, and their immediate financial hardship (bank account attachment) is addressed.