2024 (9) TMI 1636 - HC - GST

Claim of wrongful refund - willful mis-declaration of the available ITC - one single order for two Financial Years - jurisdiction to issue SCN - it is contended that the authority who has issued the Show Cause Notice could only pass the impugned order - time limitation - HELD THAT - The parameters under which this Court ought to entertain the writ petition are not satisfied. Be that as it may, it is also pertinent to take note of that this Court is not exercising its jurisdiction on the ground that the Petitioners herein have an adequate, alternative and efficacious remedy provided under Section 107 of the Assam GST Act, 2017. It is however apposite to mention that in order that the remedy which is available to the Petitioners is an efficacious and adequate remedy, the Petitioners should also be able to raise all the issues which the Petitioners could have raised in the instant proceedings. This Court is not inclined to entertain the instant writ petition insofar as the challenge to the impugned order dated 12.08.2024 on the ground of availability of alternative and efficacious remedy. However, the Petitioner herein would be at liberty to file an appeal under Section 107 of the AGST Act, 2017. This Court had perused the materials on record and there is no mention as to how much amount/amounts lying in the bank accounts of the Petitioner No. 2 and his relatives which have been frozen. There is also no mention as to whether the Petitioners have other bank account(s). It is also clear from the mandate of Section 107 (6) (b) of the Act of 2017 that the pre-deposit of 10% of the tax amount is required to be deposited and there is no provision for waiver by the Appellate Authority. It is well settled that the amount to be paid as pre-deposit is for filing or entertaining the Appeal and not for realization of the tax amount . In the account(s) which have been frozen as stated in the Show Cause Notice dated 09.04.2024 and if the said accounts are still unoperational on account of the freeze, the Appellate Authority is directed to permit the filing of the Appeal(s) as well as to entertain the Appeal(s) without any predeposit subject to the accounts which have been frozen (the details mentioned in the Show Cause Notice dated 09.04.2024), has/have deposit(s) equivalent or more than the amount required to be deposited in terms with Section 107 (6) (b) of the Act of 2017. Petition disposed off.

Summary

Issues Involved:
1. Passing of a single order for two financial years under Section 74 (10) of the Assam GST Act, 2017.
2. Jurisdictional authority to pass the impugned order.
3. Initiation of proceedings under Section 74 of the Assam GST Act, 2017 after dropping proceedings under Section 61.
4. Violation of principles of natural justice.
5. Availability of alternative and efficacious remedy under Section 107 of the Assam GST Act, 2017.
6. Requirement of pre-deposit for filing an appeal.

Issue-wise Detailed Analysis:

1. Passing of a Single Order for Two Financial Years:
The Petitioners contended that under Section 74 (10) of the Assam GST Act, 2017, the Respondent No. 4 could not have passed a single order for two financial years. The Court opined that although the authority should ideally pass separate orders for each financial year, the passing of a single composite order does not render the order without jurisdiction or invalid.

2. Jurisdictional Authority to Pass the Impugned Order:
The Petitioners argued that the notice was issued by Respondent No. 3, but the order was passed by Respondent No. 4, claiming that only the authority who issued the Show Cause Notice could pass the impugned order. The Court found this submission to be misconceived, noting that the concerned authority had the jurisdiction to pass the order.

3. Initiation of Proceedings under Section 74 After Dropping Proceedings under Section 61:
The Petitioners claimed that since proceedings under Section 61 for the tax period April 2022 to March 2023 were dropped, no proceedings could be initiated under Section 74 for the same period. The Court did not find merit in this argument, indicating that the initiation of proceedings under Section 74 was within the jurisdiction of the authority.

4. Violation of Principles of Natural Justice:
The Petitioners alleged a violation of natural justice, asserting they were not afforded an additional opportunity to submit a reply to the Show Cause Notice. The Court held that the Petitioners were given an opportunity to submit their reply and failed to do so. The Court observed that the Petitioners acted casually and did not follow up after requesting additional time, thus there was no violation of natural justice.

5. Availability of Alternative and Efficacious Remedy:
The Respondents argued that the Petitioners have an alternative and efficacious remedy under Section 107 of the Assam GST Act, 2017, and thus the writ petition should not be entertained. The Court agreed, referencing the Supreme Court's judgment in PHR Invent Educational Society Vs. UCO Bank, which emphasized that High Courts should not entertain writ petitions if an effective remedy is available. The Court concluded that the Petitioners could raise all issues in the appeal under Section 107.

6. Requirement of Pre-deposit for Filing an Appeal:
The Petitioners expressed concerns about the requirement of a 10% pre-deposit for filing an appeal, given that their bank accounts were frozen. The Court directed that if the frozen accounts contain sufficient funds, the Appellate Authority should permit the appeal without requiring an additional pre-deposit. If the funds are insufficient, the Petitioners must deposit the shortfall to comply with Section 107 (6) (b) of the Act.

Conclusion:
The Court did not entertain the writ petition due to the availability of an alternative remedy under Section 107 of the Assam GST Act, 2017. The Petitioners were granted liberty to file an appeal and raise all relevant issues before the Appellate Authority. The Court provided specific directions regarding the pre-deposit requirement, balancing the equities and interests of justice. The writ petition was disposed of with these observations and directions.