2023 (3) TMI 326 - HC - GST

Constitutional validity of Section 140(3)(iv) of the Central Goods and Services Tax Act, 2017 - non application of mind - petitioner had submitted a declaration in its return that there is Nil inventory but the respondents have not given due consideration to the said fact and has passed the impugned order-in-original - HELD THAT - Admittedly, there is a statutory appellate remedy available to the petitioner as per Section 107 of the Goods and Services Tax Act as against the impugned order in original dated 21.12.2022. The principles of natural justice has not been violated by the respondents as seen from the impugned order in original dated 21.12.2022. The respondents may have committed an error in coming to the conclusion in the impugned order-in-original. The contentions raised by the petitioner in this writ petition will not amount to violation of principles of natural justice. Since the petitioner has approached this Court under Article 226 of the Constitution of India by filing this writ petition without exercising the statutory appellate remedy available to them under Section 107 of the Goods and Services Tax Act, the present writ petition is not maintainable. This writ petition is disposed of by directing the petitioner to approach the statutory appellate authority if aggrieved by the impugned order-in-original dated 21.12.2022 passed by the second respondent.

Issues:
Challenge to constitutional validity of Section 140(3)(iv) of the Central Goods and Services Tax Act, 2017; Alleged violation of principles of natural justice in the impugned order-in-original dated 21.12.2022; Availability of statutory appellate remedy under Section 107 of the Goods and Services Tax Act; Maintainability of the writ petition under Article 226 of the Constitution of India.

Analysis:

1. Challenge to Constitutional Validity of Section 140(3)(iv):
The petitioner challenged the constitutional validity of Section 140(3)(iv) of the Central Goods and Services Tax Act, 2017 in previous writ petitions. The current writ petition was filed based on the grounds that the impugned order-in-original dated 21.12.2022 was passed without due consideration of the pending challenge to the said section. The petitioner argued that the respondent's failure to acknowledge this challenge amounted to a violation of principles of natural justice.

2. Violation of Principles of Natural Justice:
The petitioner contended that despite submitting a declaration indicating Nil inventory, the respondents did not consider this fact before passing the impugned order-in-original. The petitioner alleged a violation of natural justice due to the respondent's failure to apply their mind to the submitted declaration. However, the court found that while errors may have occurred in reaching the decision, the contentions raised did not amount to a violation of natural justice. The court emphasized the availability of a statutory appellate remedy under Section 107 of the Goods and Services Tax Act for addressing grievances against the impugned order.

3. Statutory Appellate Remedy under Section 107:
The court noted that there was a statutory appellate remedy available to the petitioner under Section 107 of the Goods and Services Tax Act concerning the impugned order-in-original dated 21.12.2022. It was clarified that the principles of natural justice were not breached in the impugned order, and any errors made by the respondents did not invalidate the need for the petitioner to pursue the statutory appellate authority as per the provisions of the Act.

4. Maintainability of the Writ Petition under Article 226:
The court concluded that since the petitioner had not exhausted the statutory appellate remedy available under Section 107 of the Goods and Services Tax Act before approaching the court under Article 226 of the Constitution of India, the writ petition was deemed not maintainable. Consequently, the court directed the petitioner to seek recourse through the statutory appellate authority if dissatisfied with the impugned order-in-original dated 21.12.2022.

In summary, the court dismissed the writ petition, emphasizing the importance of following the statutory appellate process provided under the law before seeking judicial intervention under Article 226.

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