2025(06)LCX0365

Calcutta High Court

P.B. ENTERPRISES

Versus

UNION OF INDIA

W. P. A. 1002 of 2025 decided on 16-06-2025

16

16.06.2025

IN THE HIGH COURT AT CALCUTTA
Circuit Bench at Jalpaiguri

W. P. A. 1002 of 2025

P.B. Enterprise
Vs.
Union of India and Ors.

Dr. Avinash Poddar,
Mr. Dhiraj Lakhotia,
Ms. Radhika Agarwal,
Ms. Meghna Joshi,
Ms. Khushi Kundu.
                                            … for the petitioner

Mr. Ratan Banik,
Mr. Bishwa Raj Agarwal.
                                        … for the respondents

1. The Petitioner has filed the present writ petition seeking quashing and setting aside of the order dated 24.01.2023 passed by the Additional Commissioner, CGST & Central Excise, Siliguri Appeal Commissionerate (Respondent No. 2 herein), under Section 107(11) of the Central Goods and Services Tax Act, 2017 (“CGST Act”). By the impugned order, Respondent No. 2 reversed the order dated 26.02.2021 passed by the Assistant Commissioner (Respondent No. 4), whereby the Petitioner’s refund claim was allowed.

2. The Petitioner is engaged in the business of manufacturing plastic products and trading and exporting cigarettes and tobacco products. In September 2020, the Petitioner effected zero-rated supplies of goods to Bhutan through the Land Customs Stations at Darranga and Hatisar, in accordance with the provisions of the Integrated Goods and Services Tax Act, 2017. The Petitioner claims entitlement to refund of unutilized input tax credit under Section 54(3) of the CGST Act and West Bengal Goods and Services Tax Act (“WBGST Act”), read with Rule 89(4) of the CGST Rules, 2017.

3. The Petitioner filed a refund application dated 22.11.2020 claiming a refund of Rs.1,49,54,905/-. The said claim was allowed by Respondent No. 4 by order dated 26.02.2021. Subsequently, the refund order was challenged by the departmental authorities by way of an appeal before Respondent No. 2 in GST Appeal No. 03. The said appeal was allowed by Respondent No. 2 vide order dated 24.01.2023, directing recovery of Rs.1,04,44,754/- from the Petitioner. Thereafter, the Petitioner was served with a series of proceedings including (i) Show Cause-cum-Demand Notice dated 11.04.2023, (ii) Order No. 09/AC/CGST/JAL DIVN/2023-24 dated 08.02.2024, (iii( Summary of order in Form GST DRC-07 dated 16.02.2024, and (iv) Recovery notice dated 12.12.2024.

4. Although the impugned order dated 24.01.2023 is appealable under Section 112 of the CGST Act, 2017, the Petitioner has approached this Court by way of a writ petition on account of the non-functioning of the Appellate Tribunal.

5. The principal grievance of the Petitioner is that the Appellate Authority failed to consider crucial documents, including shipping bills and other evidentiary records submitted during the appellate proceedings in support of the refund claim.

6. Learned Counsel for the Petitioner submits that the requirement of submitting shipping bills was never communicated to the Petitioner at the initial stage. The need to furnish such documents came to the Petitioner’s knowledge only during the appellate proceedings, whereupon the Petitioner duly submitted the relevant records. However, the Appellate Authority failed to take the said documents into consideration, thereby resulting in grave prejudice and miscarriage of justice.

7. Learned Counsel for the Petitioner has placed reliance on the judgment rendered by a Co-ordinate Bench in WPA No. 766 of 2022 in support of the submissions advanced.

8. Per contra, Mr. Banik, learned Counsel appearing for the Respondents, disputes the aforesaid contentions and submits that the Appellate Authority considered all materials placed on record, including the additional documents submitted by the Petitioner, and rendered a reasoned order thereon.

9. Upon a careful examination of the submissions made by the respective parties and scrutiny of the records, this Court is of the considered view that the Appellate Authority ought to have duly examined the documents placed before it by the Petitioner in support of the refund claim.

10. Rule 112 of the CGST Rules, 2017 empowers the Appellate Authority to admit additional evidence under certain circumstances. Subrule (4) of Rule 112, being a non-obstante provision, permits the Appellate Authority to direct production of documents or examination of witnesses if necessary for effective adjudication. In the present case, the Appellate Authority rejected the additional documents without assigning any cogent reason as to their relevancy or admissibility. Further, the Respondents have not demonstrated that the documents submitted by the Petitioner were either irrelevant or inadmissible for a just adjudication. The Court is thus of the opinion that the Appellate Authority failed to exercise its discretion judiciously and in accordance with law by refusing to consider the additional documents submitted by the Petitioner.

11. In view of the above, the impugned order dated 24.01.2023 passed by the Additional Commissioner, CGST & Central Excise, Siliguri Appeal Commissionerate, is hereby set aside and quashed. The Appellate Authority is directed to rehear the appeal, being Appeal File No. GAPPL/ADC/ GSTD/92/2021/Slg-Appeal, after duly taking into account the documents submitted by the Petitioner/assessee, as referred to in paragraph 8.7 of the impugned order. The Appellate Authority shall afford an opportunity of personal hearing to the Petitioner or his authorized representative and dispose of the appeal as expeditiously as possible, preferably within a period of four weeks from the date of communication of this order.

12. The writ petition stands disposed of with the above directions.

13. Since no affidavits have been filed by the respondents, the allegations made in the writ petition shall not be deemed to have been admitted.

14. There shall be no order as to costs.

15. Let urgent Photostat certified copy of this order, if applied for, be supplied to the parties on usual undertaking.

(Gaurang Kanth, J.)