The Bombay High Court has held that authorities can decide defective appeals on merits.
BACKGROUND
The case is that the petitioner is an exporter who applied for refund. The refund application was rejected on the ground that the petitioner availed ITC against supply made by the non-existent person. Registration of the petitioner was also cancelled. The revocation application was also rejected. The petitioner filed appeal against both matters i.e. against cancellation of registration and rejection of the refund application.
The Appellate Authority rejected the appeal on the grounds that the Appellant has not provided challan or proof of having made pre-deposit, fling of certified copy of the order against which the appeal is filed has not been complied with and further the appeal is not signed by the proprietor nor has the Appellant submitted any authority letter of the signatory. The Appellate Authority also held the case on merit i.e. upheld the cancellation order and observed that the petitioner has created a syndicate with intent to evade payment of CGST by wrongly availing ITC in one firm and utilizing the same in another firm for availing refund claim on account of export.
RULING
The court held that the Commissioner (Appeal) was not justified in deciding the matter on merits after having come to a conclusion that the appeal is to be rejected on the ground of no proof of pre-deposit, failure to file certified copy of the order and the appeal not having been authenticated as per rule 26(2)(a) of the CGST Rules. If the appeal is rejected on this ground, then in our view any adjudication on merits is not permissible by the Appellate Authority and would be without jurisdiction.
The court said that the Commissioner (Appeal) ought to have issued a defect memo calling upon the Petitioner to produce the proof of pre-deposit of tax as per section 107(6) of the CGST Act, 2017, for fling the certified copy of the order and for authentication of the appeal memo as per rule 26(2)(a). The Commissioner (Appeal) having not given an opportunity to the Petitioner for curing the procedural defect was not justified in rejecting the appeal. This would be contrary to the principle of natural justice.
The order passed with direction to Commissioner (Appeal) that the Commissioner (Appeal) will issue a defect memo to the Petitioner pointing out the procedural defect in the appeal and would give adequate opportunity for rectifying the same.
Case Title: JEM Exporter V/s Union of India
Citation: Writ Petition (L) No.25142 Of 2022