2024 (4) TMI 519 - HC - GST

Maintainability of petition - statutory remedy of appeal under Section 107 of the The Central Goods and Services Tax Act, 2017 - HELD THAT - The matter involves interpretation of a judgement rendered by Hon'ble the Apex Court in the case of C.C., C.E. S.T.-Bangalore vs. Northern Operating Systems Pvt Ltd. 2022 (5) TMI 967 - SUPREME COURT . It is for this reason that several other High Courts have also entertained the writ petitions both on inception of proceeding or even after an assessment order passed by the assessing authority. The matter requires consideration on the nature of the agreement of employment and the application of law in the judgement rendered by Hon'ble the Apex Court in C.C., C.E. S.T.-Bangalore vs. Northern Operating Systems Pvt Ltd therefore, the preliminary objection for that limited purpose is overruled. Let a counter affidavit be filed within three weeks to which rejoinder affidavit, if any, may be filed within one week thereafter. - List after expiry of the aforesaid period.

Summary

Issues Involved:
1. Maintainability of writ petition against order of assessment when statutory remedy of appeal is available u/s 107 of CGST Act, 2017.

Summary:

The judgment by the High Court of Allahabad addressed the issue of the maintainability of a writ petition against an order of assessment when a statutory remedy of appeal is available u/s 107 of the CGST Act, 2017. The senior counsel for the opposite parties raised a preliminary objection, arguing that the petitioner should not bypass the remedy of appeal. Reference was made to the Apex Court judgment in the case of N. P. Ponnuswami vs. Returning Officer Namkkal Constituency, emphasizing the effectiveness of statutory remedies.

The Court clarified that the statutory remedy provided under the law does not oust the jurisdiction of the Writ Court, as the constitutional remedy is superior. The petitioner's counsel argued that the salary paid to international assignees was already subjected to income tax u/s 192 of the Income Tax Act, 1962, and therefore, should not be considered a service contract for the purpose of CGST.

The judgment also involved the interpretation of a previous Apex Court judgment in the case of C.C., C.E. & S.T.-Bangalore vs. Northern Operating Systems Pvt Ltd. The Court ruled that the nature of the employment agreement and the application of law in the previous judgment needed consideration, thereby overruling the preliminary objection regarding the maintainability of the writ petition.

The Court directed the filing of a counter affidavit within three weeks, with a provision for a rejoinder affidavit thereafter. The outcome of the petition would determine the fate of the deposit made under protest, and the demand from the impugned order was to remain in abeyance until further proceedings.