Order Date – 12 December 2023

Parties: M/S N.G. Enterprises And Another Vs State Of U.P. And 3 Others

Facts –

• The Petitioner, M/S N.G. Enterprises, has assailed the order passed by the first appellate authority under the Uttar Pradesh Goods and Services Tax Act as well as the Central Goods and Services Tax Act. The second appeal lies before the appellate tribunal under Section 112 of the respective Acts.

Issue –

• Whether the appeal denied on account of the failure of the appropriate Government to constitute the tribunal is proper and valid?

Order –

• The Single Bench of Hon’ble High Court observed that the second aspect which requires to be given weight is that the assessee cannot be faulted for what is essentially a failure of the Government. The statute contemplates deposit of 10% plus 20% of the disputed tax liability before the first and second appellate authorities respectively. By imposing a demand of 50% in these matters, the assessees will be penalized for no fault of theirs. This is the rationale which is borne out from the first set of interim orders rendered in M/S Kent Cables, M/S Tulsi Steels and M/S Nandan Sales Corporation.
• The grant of interim orders in the aforesaid manner made in the said orders passed by this Court balances the interests of revenue as well as the rights of the assessees. However, it needs to be clarified that it is always open to the Court to grant interim orders which are at variance with the aforesaid orders in peculiar facts and circumstances of a particular case while exercising writ jurisdiction in the interests of justice.
• The application for interim relief is finally disposed of with the direction of depositing  20% of the disputed tax liability in addition to the earlier deposit before the assessing authority (which is 10% of the disputed tax amount). Subject to the aforesaid deposit, the recovery proceedings of the balance amount shall remain stayed till the decision of this writ petition.