2024 (5) TMI 312 - HC - GST

Time limitation for filing appeal - petitioner did not file any appeal either within the period of limitation as prescribed under Section 107 of the RGST Act, 2017/ the CGST Act, 2017 or within the maximum period thereafter which could be condoned - liability of tax with interest and penalty on royalty - HELD THAT - Present is a case where the petitioner did not even file appeal and allowed the order passed in assessment proceedings to become final and thereafter approached this Court by filing writ petition seeking to challenge the determination of tax, interest and penalty by the competent authority vide order dated 09.02.2023. Present is not a case where the order under Section 74 of the RGST Act, 2017/ the CGST Act, 2017 levying tax along with interest and penalty was passed without giving any opportunity of hearing to the petitioner. Even according to the petitioner, he was issued show cause notice and thereafter, impugned order was passed. In the writ petition, no plausible explanation has been offered as to why the petitioner did not take recourse to the remedy of statutory appeal. It, therefore, appears that the petitioner consciously did not choose to take recourse to the remedy of appeal as provided under Section 107 of the RGST Act, 2017/the CGST Act, 2017, but waited for the expiry of the period of limitation for filing appeal as also the maximum period of delay which could be condoned in the exercise of powers conferred upon the appellate authority under the provisions of Section 107 of the RGST Act, 2017/ the CGST Act, 2017. Having not preferred an appeal, the petition in the present case, in view of the decision of Hon'ble Supreme Court in the case of ASSISTANT COMMISSIONER (CT) LTU, KAKINADA ORS. VERSUS M/S. GLAXO SMITH KLINE CONSUMER HEALTH CARE LIMITED 2020 (5) TMI 149 - SUPREME COURT is not maintainable. Petition dismissed.

Summary

Issues:
The correctness and validity of show cause notice u/s 74 of the Rajasthan Goods and Services Tax Act, 2017 and the Central Goods and Services Tax Act, 2017 for financial year 2018-19, and the order directing deposit of service tax on royalty, interest, and penalty.

Issue 1: Challenge to Show Cause Notice and Order:
The petitioner challenged the show cause notice and order issued by Respondent No. 3 under Section 74 of the RGST Act, 2017/CGST Act, 2017 for the financial year 2018-19, directing the deposit of Rs. 2,72,926 towards service tax on royalty, interest, and penalty. The petitioner raised multiple grounds to contest the notice and order. However, it was pointed out that the petitioner did not file an appeal within the prescribed period or seek condonation for delay as allowed by law. Citing a Supreme Court decision, it was argued that the writ petition is not maintainable due to the failure to pursue the statutory remedy of appeal within the specified time limits.

Issue 2: Maintainability of Writ Petition:
The case of Glaxo Smith Kline Consumer Health Care Limited was referenced to determine the maintainability of the writ petition. In that case, the Supreme Court held that failure to avail the statutory remedy of appeal within the prescribed time renders a writ petition not maintainable. The Court emphasized that the appeal process is a creation of statute and must be adhered to within the specified time frame. Detailed considerations were made regarding the delay in filing the appeal, awareness of the assessment order, and explanations provided by the respondent. It was concluded that the writ petition was not maintainable in such circumstances.

Issue 3: Failure to File Appeal:
The petitioner in the present case did not file an appeal challenging the order passed in the assessment proceedings, allowing it to become final. Despite being issued a show cause notice and given an opportunity to be heard, the petitioner did not provide a plausible explanation for not pursuing the statutory appeal remedy. The Court noted that the petitioner consciously chose not to appeal within the prescribed time limits, leading to the dismissal of the writ petition based on the precedent set by the Glaxo Smith Kline case.

In conclusion, the writ petition challenging the show cause notice and order directing the deposit of service tax was dismissed by the Court due to the petitioner's failure to file an appeal within the statutory time limits, as required by the RGST Act, 2017/CGST Act, 2017.