Bhagyoday Agro Industries vs Commissioner (Appeals) CGST & Central Excise & Ors.

By this Petition, the Petitioner is challenging the Order dated 19^th May, 2026, passed in the proceedings filed before the Office of Commissioner (Appeals), CGST and Central Excise, Nashik.

The Petitioner is registered under the CGST Act and is engaged in the trading of cotton. As per the information gathered by the Officers of the Directorate General of Goods and Service Tax Intelligence Nashik Region Unit, regarding non-payment of GST by the Appellant under the Reverse Charge Mechanism (RCM) on the purchase of rock cotton from agriculturists, a search was conducted by the Officers under Section 67 of the CGST act 2017 (CGST Act). The GST liability under RCM on purchase of rock Cotton from agriculturists was quantified to the tune of ₹14,77,57,828/-. Accordingly, the Appellant was issued show cause notice. The Adjudicating Authority passed Order dated 28^th October, 2024, confirming the demand of ₹14,77,57,828/-and had appropriate tax amount of ₹1,50,00,000/-.

Being aggrieved and dissatisfied with the Order passed by the Adjudicating Officer, the Applicant has preferred Appeal electronically on 3^rd February, 2025. It is the contention of the Appellant that the Appellate Authority on 19^th May, 2026, rejected the Appeal filed by the Appellant and confirmed the Order in original passed by the Additional Commissioner, CGST & CX Aurangabad.

The Appellant has challenged the impugned Order passed by the Commissioner, CGST & CX dated 19^th May, 2026, on the ground that the impugned Order does not take into consideration the fact that an amount of ₹1,50,00,000/-was deposited by the Petitioner during the course of the investigation, which was appropriated against the demand. The Petitioner contended that despite such adjustment, Respondent No.1 arbitrarily proceeded to reject the Appeal filed by the Petitioner without considering that the amount already deposited by the Petitioner during the course of investigation far exceeded the statutory pre-deposit amount as per Circular dated 11^th July, 2024.

The learned Counsel appearing for the Petitioner stated that the impugned Order is passed in a gross violation of principles of natural justice. No defect memo, notice or opportunity was granted before dismissing the Appeal.

The learned Counsel appearing for the Revenue supported the Judgment and Order. The learned Counsel appearing for the Revenue stated that the impugned Judgment and Order does not suffer from any error and that the Appeal was rightly rejected.

We have perused the impugned Order dated 19^th May, 2026. It is not in dispute that no defect memo, notice or opportunity was granted to the Petitioner before dismissing the Appeal. The Petitioner had already deposited an amount of ₹1,50,00,000/- during the course of investigation. This amount far exceeded the statutory amount required to be deposited before filing of the Appeal. The Appellate Authority ought to have applied the well settled principle that when an Appeal is to be dismissed for adding a shortfall in pre-deposit, the Appellant has to be given a no defect memo, notice or opportunity of hearing before dismissal of the appeal. The Petitioner is definitely required to be given an opportunity to satisfy the shortfall. In this case, the contention of the Petitioner that the amount of Rs.1,50,00,000/- was already deposited is also a relevant fact, which is not considered by the Appellate Authority. In this premise, we have no hesitation to set aside the impugned Judgment and Order dated 19^th May 2026, passed by the Commissioner (Appeals), CGST and Central Excise, Nashik passed in proceedings bearing No.NSK/GST/000/APPL/52/2026-27 dated 19^th May, 2025. Hence the following Order.

All contentions of the parties on merits are kept open.

Writ Petition No.9256 of 2026 is disposed of accordingly.