2024 (9) TMI 1205 - HC - GST

Correctness and validity of SCN - challenge to the assessment order on the sole ground that the statutory remedy of appeal - 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 21.12.2022. 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 is not maintainable - Petition dismissed.

Summary

Issues:
Challenge to show cause notice and order under RGST Act, 2017/CGST Act, 2017 for financial year 2017-18.
Maintainability of writ petition due to failure to file appeal within statutory period.

Analysis:
1. The petitioner challenged the show cause notice and order issued under the RGST Act, 2017/CGST Act, 2017 for the financial year 2017-18. The petitioner sought to question the correctness and validity of the notice and order demanding the deposit of a specific amount towards service tax, interest, and penalty.

2. The respondents argued that the petitioner did not file an appeal within the prescribed period or seek condonation for the delay in filing the appeal, as allowed under Section 107 of the RGST Act, 2017/CGST Act, 2017. Citing the decision of the Supreme Court in a similar case, it was contended that the writ petition was not maintainable due to the failure to avail the statutory remedy of appeal.

3. Referring to the case of Glaxo Smith Kline Consumer Health Care Limited, the court deliberated on the issue of whether a challenge to an assessment order can be entertained under Article 226 of the Constitution when the statutory remedy of appeal is foreclosed due to limitation. The court highlighted the importance of adhering to statutory appeal timelines and the consequences of not availing the appeal remedy.

4. The Supreme Court, after detailed consideration, concluded that the writ petition was not maintainable if filed beyond the statutory period for appeal. The court emphasized that the appeal remedy is a creation of statute and failure to adhere to appeal timelines cannot be a basis for challenging the assessment order through a writ petition.

5. The court further analyzed the circumstances of the present case where the petitioner did not file an appeal despite being aware of the assessment order and the available remedy of appeal. The court noted that the petitioner consciously chose not to pursue the statutory appeal and instead waited for the appeal period to expire, leading to the dismissal of the writ petition based on the precedent set by the Supreme Court.

6. Ultimately, the court dismissed the writ petition, emphasizing that the petitioner's failure to file an appeal within the statutory period rendered the petition not maintainable, in line with the principles established by the Supreme Court in similar cases.