2024 (8) TMI 638 - HC - GST

Maintainability of petition - availability of alternative remedy - Challenge to the vires of Section 16(2)(c) of the CGST/Gujarat GST Act 2017 - disallowance of input tax credit claimed by the petitioner - HELD THAT - It appears that the impugned order passed by the respondent Assessing Officer is appealable under Section 107 of the GST Act. The Hon ble Apex Court in case of THE ASSISTANT COMMISSIONER OF STATE TAX AND OTHERS VERSUS M/S COMMERCIAL STEEL LIMITED 2021 (9) TMI 480 - SUPREME COURT after considering the provisions of Section 107 of the GST Act, has held ' In the present case, none of the above exceptions was established. There was, in fact, no violation of the principles of natural justice since a notice was served on the person in charge of the conveyance. In this backdrop, it was not appropriate for the High Court to entertain a writ petition. The assessment of facts would have to be carried out by the appellate authority. As a matter of fact, the High Court has while doing this exercise proceeded on the basis of surmises.' When there is alternative efficacious remedy available to the petitioner under Section 107 of the Act, the petitioner is relegated to avail the same - petition disposed off.

Summary

Issues:
Challenge to the vires of Section 16(2)(c) of the CGST/Gujarat GST Act 2017, Quashing of recovery order under Section 74 of the SGST Act 2017, Input tax credit disallowance, Availability of alternative remedy under Section 107 of the GST Act.

Analysis:

1. Challenge to Section 16(2)(c) of the GST Act:
The petitioner sought to challenge the vires of Section 16(2)(c) of the CGST/Gujarat GST Act 2017 through a petition under Article 227 of the Constitution of India. The petitioner prayed for the declaration of the section as ultra vires to the Constitution and the nullification of an order directing recovery under Section 74 of the SGST Act 2017. The petitioner contended that the respondent authorities wrongly disallowed input tax credit claimed, despite detailed submissions regarding goods receipt and GST payment to suppliers. However, the court noted that the impugned order was appealable under Section 107 of the GST Act, citing a relevant judgment to emphasize the availability of an alternative statutory remedy. Consequently, the court relegates the petitioner to avail the remedy under Section 107, leading to the disposal of the petition.

2. Quashing of Recovery Order under Section 74 of the SGST Act 2017:
The petitioner challenged an order dated 10/05/2024 directing the recovery of a substantial amount under Section 74 of the SGST Act 2017. The respondent alleged discrepancies in input tax credit availed by the petitioner from certain firms. The petitioner contended that payments were made to these firms with GST, and they were willing to pay any outstanding amounts. Despite the petitioner's submissions, the respondent passed the impugned order. The court highlighted the petitioner's readiness to fulfill financial obligations but emphasized the availability of an appeal mechanism under Section 107 of the GST Act, leading to the dismissal of the petition at this stage.

3. Input Tax Credit Disallowance:
The respondent raised concerns regarding the petitioner's input tax credit claims, citing issues such as availing credit from firms with canceled GST numbers, delayed filing of returns, late fees, and non-payment under the reverse charge mechanism. The petitioner responded to the show-cause notice with a detailed reply, asserting compliance with GST requirements. The court acknowledged the petitioner's contentions but stressed the need to pursue the statutory remedy under Section 107 for a comprehensive assessment of facts. As per the court's analysis, the petitioner's challenge to the input tax credit disallowance is subject to the appellate authority's review under the statutory provisions.

4. Availability of Alternative Remedy under Section 107 of the GST Act:
The court's decision to relegate the petitioner to the statutory remedy under Section 107 of the GST Act stems from the principle that an alternative efficacious remedy must be pursued before seeking judicial intervention. Citing a relevant judgment, the court underscores the importance of allowing the appellate authority to assess facts and make determinations in matters concerning GST disputes. By emphasizing the availability of the statutory remedy, the court dismisses the petition, indicating that the petitioner should utilize the prescribed appellate process for addressing grievances related to the actions of the state authorities in the present case.