2024 (12) TMI 580 - HC - GST

Excess ITC claimed in GSTR-3B not confirmed in GSTR-2A without even appreciating the fact that the original scheme of GST never came into effect for the period under dispute - Demand of tax under GST alongwith interest - HELD THAT - It is satisfied that no case is made out to depart from the practice of exhaustion of alternate remedies based on the pleadings in this Petition or the contentions advanced by the Petitioner. The argument that CBIC circulars are not being followed can always be raised before the appellate authority. Simply styling the impugned order as being without jurisdiction or perverse is insufficient to circumvent the practice of exhausting alternate remedies. In Oberoi Constructions Ltd 2024 (11) TMI 588 - BOMBAY HIGH COURT several decisions are summarised on exhausting alternate remedies. By following the reasoning in that decision instead of repeating it in this order we are satisfied that no case is made out to depart from the usual practice of exhausting alternate remedies. It is declined to entertain this Petition and relegate the Petitioner to avail of the alternate appeal remedy by fulfilling the pre-deposit conditions - The Petition is disposed of.

Summary

Issues:
Challenge to order under Section 73 of CGST Act - Demand of Rs. 2,29,27,926 raised on Petitioner - Alternative remedy of appeal with 10% pre-deposit - Jurisdictional validity of impugned order - Compliance with CBIC circulars - Exhaustion of alternate remedies - Waiver of pre-deposit requirement - Hardship due to financial constraints - Statutory requirement of pre-deposit - Dismissal of Petition and reiteration of alternate appeal remedy.

Analysis:
The Petitioner challenged an order dated 17 October 2022 under Section 73 of the CGST Act, which demanded Rs. 2,29,27,926. The central issue raised was whether the demand was justified, considering the circumstances and the non-effectiveness of the original GST scheme for the disputed period. The Petitioner argued against the jurisdiction of the impugned order and the requirement of a 10% pre-deposit for filing an appeal, citing it as unjustified due to the alleged lack of jurisdiction and perversity in the demand.

The Petitioner contended that the impugned order was without jurisdiction as it disregarded binding CBIC circulars and was perverse. The Petitioner sought the Court to either entertain the Petition or waive the pre-deposit requirement to enable the filing of an appeal without complying with the 10% pre-deposit condition. The Respondent, through the Additional Government Pleader, opposed these submissions, asserting that the impugned order was valid and that the Petitioner should exhaust the alternate remedy of appeal as per Section 107 of the CGST Act.

The Court considered the arguments presented by both parties and concluded that there was no justification to deviate from the practice of exhausting alternate remedies. It emphasized that the issue of CBIC circular non-compliance could be raised before the appellate authority and that merely labeling the impugned order as without jurisdiction or perverse was insufficient to bypass the requirement of exhausting alternate remedies.

The Court highlighted that the statutory requirement of a 10% pre-deposit for filing an appeal should not be waived lightly, especially when the Petitioner failed to provide substantial evidence of hardship beyond a general claim. Referring to legal precedent, the Court underscored the importance of adhering to statutory pre-deposit requirements and declined to entertain the Petition, directing the Petitioner to pursue the alternate appeal remedy by fulfilling the pre-deposit conditions.

In conclusion, the Court disposed of the Petition with liberty for the Petitioner to file an appeal within 30 days. It clarified that the appellate authority should consider the appeal on its merits without raising the issue of limitation, as the Petition was filed within the prescribed limitation period. All contentions on merits were left open for the appellate authority to decide, emphasizing the importance of adhering to statutory procedures and exhausting alternate remedies before seeking judicial intervention.