2022 (4) TMI 695 - HC - GST

Short assessment - wrongful availment of input tax credit - non-compliance of provisions of Section 42(3) read with Rule 36 of the CGST Rules - HELD THAT - On a perusal of the provisions of Section 42(3) of the Act as well as the observations in the impugned order, it is said that the petitioner has an effective remedy before the appellate authority. The circumstances of the case, including the grant of opportunity for hearing before issuing the impugned order, does not warrant an interference of this Court under Article 226 of the constitution of India. Petition dismissed.

Summary

Issues: Challenge to assessment order under CGST Act, compliance with Section 42(3) and Rule 36 of CGST Rules, violation of principles of natural justice, availability of effective remedy before appellate authority.

In this judgment, the petitioner, a registered dealer under the Central Goods and Services Act, challenged the assessment order dated 14.03.2022, alleging short assessment and wrongful input tax credit availed. The petitioner contended that the assessing officer did not comply with Section 42(3) read with Rule 36 of the CGST Rules while issuing the order. It was argued that non-compliance with Section 42(3) rendered the order perverse, justifying intervention under Article 226 of the Constitution of India. Additionally, it was claimed that a reasonable opportunity of hearing was not granted before issuing the order, violating the principles of natural justice.

The Senior Government Pleader argued that the petitioner's contentions could be effectively raised before the appellate authority under Section 107 of the CGST Act. It was highlighted that the registered person was provided a hearing opportunity on 02.03.2022, and thus, there was no breach of natural justice principles. After considering the arguments and examining Section 42(3) of the Act along with the observations in the impugned order, the Court concluded that the petitioner had a suitable remedy available before the appellate authority. The Court found that the circumstances, including the hearing opportunity granted before the order issuance, did not justify interference under Article 226 of the Constitution of India.

Consequently, the Court held that the writ petition was to be dismissed, with the petitioner retaining the liberty to present all arguments raised in the petition before the appellate authority. The dismissal of the writ petition was without prejudice to the petitioner's right to pursue the statutory remedy available, emphasizing the importance of addressing the issues through the appropriate appellate channels.