The Bombay High Court in the case JEM Exporter Versus Union of India observed and has held that if the appeal is being defective for non-production of a certified copy, failure to deposit, or incorrect signatures, no order can be passed by the court on merits.
The court stated that the appellate authority erred in law while passing an order on the merits.
The bench comprising of Justice G. S. Kulkarni and Justice Jitendra Jain in the case observed and has stated that the Commissioner, Appeal, having not being given any opportunity to the Petitioner to cure the procedural defect, was not justified in rejecting the appeal. Thus, the same would be contrary to the principle of natural justice.
The bench observed and has stated that justice in the case cannot be denied for failure in order to comply with the procedure without giving an opportunity to the Appellant to rectify the procedural defects. In view of the court, the Commissioner, Appeal ought to have issued a defect memo while calling upon the Petitioner to produce the proof of pre-deposit of tax as per section 107(6) of the Central Goods And Service Tax, CGST Act, 2017, thus, for filing of the certified copy of the order and for authentication of the appeal memo stated as per rule 26(2)(a) of the Act.
In the present case, the petitioner or assessee being in the business of exporting mobile handsets. Therefore, the petitioner is being registered under the Central Goods And Service Tax, the CGST Act, 2017 as a sole proprietor. The claim for refund has been filed of input tax credit with regards to Section 54(3) of the CGST Act. The court issued the show cause notice under Section 74 came to be issued, proposing cancellation of registration and denial of input tax credit on the ground that it was a case of fake ITC.
It has also been observed by the Commissioner, Appeal that as per the investigation report that the persons from whom IJM Exporters had purchased the goods were non-existent.
Further, it has also been claimed by IJM Exporters, a fake ITC, and since the Petitioner’s purchases are from IJM Exporters, the Petitioner has also wrongfully availed of the ITC and has made a claim for the refund.
The petitioner in the plea contended before the court that the procedure has also not been followed and the registration cannot be cancelled by issuing a notice under Section 74 of the Central Goods And Service Tax, CGST Act. The plea stated that no demand could have been raised while processing of the application made for refund, but at the most, an order could have been passed rejecting the refund application.
On the other hand, it has been contended by the department that the petitioner has failed to comply with the mandatory pre-deposit of 10% for entertaining the appeal as stated under Section 107(6) of the Central Goods And Service Tax, CGST Act, 2017 and the appeal memo in the case was not signed by the proprietor of the petitioner.
The department also contended before the court that the petitioner has purchased goods from IJM, and the suppliers of IJM have been found to be non-existent.
The court in the case observed and has held that if the appellant is not directed to supply a certified copy of the adjudication order, thus, then such an order would be in violation of the principle of natural justice.
The counsel, Bharat Raichandani appeared for the Petitioner.
The counsel, Jitendra B. Mishra represented the respondent.
