2024 (2) TMI 1173 - HC - GST

Condonation of delay in filing an appeal before the Appellate Authority - Assessment of unregistered person - Ignoring the Registration Certificate already assigned - Benefit of notification extended to the assessees who suffered with demand as a result of assessment under Section 73 and Section 74 of the GST Act. But despite the fact that the petitioner is a registered and has been assessed under Section 63 of the GST Act by way of erroneous exercise of jurisdiction, such benefit would not be extended to the petitioner. - HELD THAT - There is patent error of jurisdictional fact as revealed from the records available. The Registration Certificate (Original as also Amended) granted with effect from 01.07.2017 much prior to issue of notice under Section 63 and the Assessment Order dated 29.03.2023 passed under Section 74 of the GST Act evince that the Assessing Authority was well aware of the fact that the petitioner does not fall within the scope of the expression where a taxable person fails to obtain registration even though liable to do so employed in Section 63, so as to invoke power to proceed with the assessment thereunder. This apart, it is not denied that the Assessing Authority is not authorized or competent to verify the status of the petitioner. In view of settled legal position as set forth by way of enunciation of different Courts, this Court is inclined to issue writ of certiorari. In TRIMBAK GANGADHAR TELANG VERSUS RAMCHANDRA GANESH BHIDE 1977 (1) TMI 161 - SUPREME COURT the Hon ble Supreme Court held that It is a well-settled rule of practice of this Court not to interfere with the exercise of discretionary power under articles 226 and 227 of the Constitution merely because two views are possible on the facts of a case. Article 226 of the Constitution of India preserves to the High Court power to issue writ of certiorari amongst others. The principles on which the writ of certiorari is issued are well-settled. This Court is of the considered view that the Order dated 09.08.2023 passed in Appeal bearing No. AD210223003708N by the Additional Commissioner of State Tax (Appeal), Central Zone-II, Odisha, is liable to be set aside - the matter is remitted to the Additional Commissioner of State Tax (Appeal), Central Zone-II, Odisha at Cuttack, for adjudication in accordance with law after due compliance of the principles of natural justice - Petition allowed by way of remand.

Summary

Issues Involved:
1. Jurisdictional error in assessment under Section 63 of the GST Act.
2. Delay in filing the appeal and its condonation.
3. Discriminatory application of the Notification dated 02.11.2023.

Summary:

1. Jurisdictional Error in Assessment under Section 63 of the GST Act:
The petitioner, a registered taxable person under GST since 01.07.2017, was assessed under Section 63 of the GST Act, which applies to unregistered persons. The Court found a glaring jurisdictional error as the Assessing Authority had knowledge of the petitioner's registration. The assessment under Section 63 was thus deemed illegal. The Court cited precedents to emphasize that jurisdictional facts must exist for an authority to assume jurisdiction, and erroneous assumptions cannot confer jurisdiction.

2. Delay in Filing the Appeal and Its Condonation:
The petitioner's appeal was dismissed by the Appellate Authority due to a delay of 380 days. The Court found that the petitioner had a valid reason for the delay, as the petitioner was unaware of the assessment order until the bank account was attached. The Court noted that the Appellate Authority should have considered the explanation for the delay, especially given the context of the petitioner's registration status and the erroneous assessment under Section 63.

3. Discriminatory Application of the Notification dated 02.11.2023:
The petitioner challenged the discriminatory nature of the Notification dated 02.11.2023, which allowed appeals against orders under Sections 73 and 74 but not under Section 63. The Court did not find it necessary to address this issue in detail as the petitioner did not press for this relief during the hearing. However, the Court acknowledged the petitioner's contention that the notification's exclusion of Section 63 assessments was discriminatory.

Conclusion & Decision:
The Court set aside the Appellate Authority's order dated 09.08.2023 and remitted the matter for reconsideration, emphasizing compliance with the principles of natural justice. The Court issued a writ of certiorari, highlighting the jurisdictional error and the need for a pragmatic approach in considering the delay in filing the appeal. The case was disposed of without any order as to costs.