HC Declines to Quash CGST Order, Relegating “Same Subject Matter” Dispute to Appeal.
Issue
Whether a High Court, in its writ jurisdiction, should quash a CGST assessment order on the grounds of a parallel State GST proceeding (a breach of Section 6(2)(b)), or whether the determination of the “same subject matter” is a disputed question of fact that must be decided by the statutory appellate authority.
Facts
- The assessee challenged an order issued by the Central GST authorities under Section 74 of the CGST Act.
- The primary ground for the challenge was a lack of jurisdiction, alleging that the State GST authorities had already adjudicated the “same subject matter” under the UPGST Act. This, the assessee argued, was a direct breach of the bar on parallel proceedings under Section 6(2)(b) of the CGST Act.
- The Revenue (CGST) countered this by asserting that the two proceedings were not on the “same subject matter.” They claimed the proceedings involved distinct ITC transactions arising from different supplies.
- Instead of filing a statutory appeal against the order, the assessee filed a writ petition in the High Court.
Decision
- The High Court dismissed the writ petition, declining to interfere with the assessment order under Article 226.
- It held that the question of “lack of jurisdiction” in this specific context was not a pure question of law.
- The court ruled that determining whether both proceedings concern the “same subject matter” requires a detailed factual examination of the records and transactions involved, which is the proper function of an appellate authority, not a writ court.
- The court clarified that the Supreme Court’s Armour Security ruling does not make a writ petition the exclusive remedy for such disputes, especially when factual determinations are necessary.
- The court granted the assessee liberty to file a statutory appeal within three weeks.
- It directed the appellate authority to entertain the appeal on its merits, without raising any objection as to the limitation period.
Key Takeaways
- “Same Subject Matter” is a Question of Fact: A challenge based on parallel proceedings (Section 6(2)(b)) is not an automatic jurisdictional win. If the Revenue disputes the facts and claims the transactions are different, the burden is on the assessee to prove the overlap through a factual inquiry.
- Writ Court is Not for Factual Adjudication: High Courts will relegate petitioners to the statutory appeal mechanism when a case requires a deep dive into disputed facts, records, and evidence to determine the issue.
- Alternate Remedy Rule: This judgment reinforces the “Rule of Alternate Remedy.” A taxpayer must first exhaust the statutory appeal process before invoking writ jurisdiction, unless the order is passed with a total lack of jurisdiction or in complete violation of natural justice (which was not the case here).
- Preservation of Remedy: While dismissing the writ, the court used its power to ensure the assessee was not left without a remedy. It protected the assessee’s right to appeal by condoning the delay that occurred while the writ was pending.