Full Text
HIGH COURT OF DELHI
Date of Decision: 21st February, 2025
M/S DD INTERIORS .....Petitioner
Through: Mr. Ruchir Bhatia, Adv.
Through: Mr. Atul Tripathi, SSC, CBIC and Mr. Shubham Mishra, along
Commissioner, CGST and Mr. Himanshu Dubey, Inspector.
Prathiba M. Singh, J. (Oral)
JUDGMENT
1. This hearing has been done through hybrid mode.
2. The present writ petition has been filed by the Petitioner-M/s DD Interiors under Article 226 of the Constitution of India challenging the impugned order dated 8th November, 2024, by which the Customs, Excise & Service Tax Appellate Tribunal (hereinafter ‘CESTAT’) has returned the appeal due to non-compliance of the pre-deposit condition mandated under Section 35F of the Central Excise Act, 1944.
3. Admittedly, the pre-deposit was made by the Petitioner way back on 13th August, 2018 and 17th August, 2018 itself for a sum of Rs. 1,60,600/- and Rs. 4,750/- respectively. The Petitioner has also submitted the challans 19:06 showing the deposit. The ground taken in the impugned order is that the same was deposited in a wrong account and therefore credit cannot be given of the pre-deposit and hence the appeal does not deserve consideration on merits.
4. The case of the Petitioner is that, Good and Services Tax regime (hereinafter ‘GST’) was recently enacted at the time of payment, and that there was considerable uncertainty and confusion with respect to levied rate of taxes, modes of payment.
5. Mr. Ruchir Bhatia, the ld. Counsel for the Petitioner, has pointed out the instructions given by the Ministry of Finance dated 28th October, 2022, as per which, the Central Board of Indirect Taxes & Customs (hereinafter ‘CBIC’) has clarified that the pre-deposits have to be made in the integrated portal. The Petitioner also relies upon the Bombay High Court judgment in Sodexo India Services Pvt. Ltd. vs. Union of India (2022 SCC OnLine Bom
11975) where under similar circumstances, the High Court had allowed the writ petition and ordered the appeals to be heard on merits by the CESTAT. The relevant paragraphs are read as under:
19:06 to have not complied with the precondition of predeposit. Strangely in the order respondent No. 3 does not state how the deposit should have been made. According to petitioner, even during the personal hearing respondent No. 3 was totally silent and never brought to the notice of petitioner as to how the deposit should have been made. ********** ************* *************
7. Therefore, it does appear that the confusion seems to be due to there being no proper legal provision to accept payment of pre-deposit under Section 35F of the Central Excise Act, 1944 through DRC-03. Some appellants are filing appeals after making pre-deposit payments through DRC-30/GSTR-3B. In our view, this has very wide ramifications and certainly requires the CBI & C to step, in and issue suitable clarifications/guidelines/answers to the FAQs. We would expect CBI & C to take immediate action since the issue has been escalated by Mr. Lal over eight months ago.
8. In the circumstances, we hereby quash and set aside the impugned orders dated 13th April 2022 and direct respondent No. 3 to hear petitioner de novo and pass such orders as he deems fit on merits in accordance with law.”
6. Mr. Ruchir Bhatia, ld. Counsel also relies upon a recent decision of the CESTAT, Allahabad, where Sodexo has been followed and the CESTAT Allahabad Bench has also held that such non-hearing on merits would amount to denial of substantial justice. The relevant portions of the CESTAT Allahabad order in M/s Shri Krishna Road Carrier (Proprietor Vijay Kumar Gupta) vs Commissioner of Central Excise & CGST, Meerut, 2024 (6) TMI 188 are as under: 19:06
19:06 (Appeals). The appeal filed by the Appellant is allowed by way of remand to the Commissioner (Appeals).”
7. In the present case, the deposit of the 7.5% was made in an account when the integrated portal was not fully functional. This Court had on the last occasion vide order dated 23rd January, 2025 observed as under:
8. Further to the previous order, the Counter Affidavit was filed by the Department, wherein it is accepted as under: “14.That the new payment system, which started in July 2019, was not available before that. Therefore, the system for making pre-deposits through the CBIC-GST Integrated portal did not exist in 2018, when the petitioner made the 7.5% pre-deposit for the first appeal. The taxpayer followed the process allowed at that time, which was accepted by the Appellate Authority during the first appeal.
15. That the appellant initially deposited 7.5% of the disputed amount, which was accepted by the Appellate Authority for the first appeal. Later, the appellant deposited 2.5% of the disputed amount via DRC- 03 when filing the appeal before the Appellate Tribunal.” 19:06
9. Therefore, there is no dispute about the fact that 7.5% was initially deposited before the Commissioner (Appeals) at that time when the integrated portal did not exist. Thereafter, while approaching the CESTAT, the remaining 2.5% has been deposited by the Petitioner. Thus, in effect the entire 10% which is the pre-deposit amount, stood deposited.
10. Considering these circumstances, the appeal could not have been rejected merely on the ground that it was deposited on a wrong account especially when the said integrated portal was not even available for the Petitioner at the time of the initial deposit.
11. Following the decision of the Bombay High Court in Sodexo India Services Pvt. Ltd. vs. Union of India, this Court is, therefore, inclined to direct that the appeal would now be heard by CESTAT on merits without any further deposit being insisted upon. The deposit already made shall be treated as satisfaction of the pre-deposit condition.
12. In view of the above discussion, the present writ petition is allowed. The order dated 08th November, 2024 passed by CESTAT is set aside. The petition of the Petitioner is restored to its original number before CESTAT and shall now be heard on merits without any further pre-deposit.
13. At this stage, Mr. Bhatia, ld. Counsel submits that CESTAT has returned the appeal papers. If so, the Petitioner is permitted to re-present the same before CESTAT within 30 days. The same shall not be dismissed on the ground of limitation and shall now be heard on merits. 19:06
14. The petition is disposed of in the above terms. Pending applications, if any, are also disposed of.
PRATHIBA M. SINGH JUDGE RAJNEESH KUMAR GUPTA JUDGE FEBRUARY 21, 2025/nd/am 19:06