Writ Petition Challenging GST Show Cause Notice Dismissed in Due to Availability of Alternate Remedy

Summary in Key Points:

Issue: Whether a writ petition challenging a show cause notice (SCN) issued for multiple years under Section 73 of the GST Act is maintainable when the assessee has an alternate remedy of appeal.
Facts: The assessee challenged a single SCN issued for two different periods (2019-20 and 2020-21), arguing that separate SCNs should have been issued.
Decision: The High Court dismissed the writ petition, holding that the assessee should avail the alternate remedy of appeal under Section 107 of the GST Act.

Analysis:

The High Court ruled in favor of the revenue department, dismissing the writ petition. The court emphasized the following:

Alternate Remedy: The assessee had an effective alternate remedy available in the form of an appeal under Section 107 of the GST Act.
Efficiency of Appellate Process: The appellate authority is well-equipped to address the assessee’s grievance regarding the single SCN issued for multiple periods.
Section 14 of the Limitation Act: The court clarified that if the assessee chooses to file an appeal, they would be entitled to the benefit of Section 14 of the Limitation Act, 1963, which deals with the exclusion of time spent in pursuing other legal remedies.

Important Note: This case reinforces the principle that writ jurisdiction should not be invoked when an effective alternate remedy is available. The High Court’s decision encourages the use of the statutory appeal mechanism provided under the GST Act, ensuring that tax disputes are resolved efficiently and in accordance with the prescribed procedures.

HIGH COURT OF KARNATAKA

Apoorva Construction Co.

Commercial Tax Officer

M.I. Arun, J.

WRIT PETITION NO. 32542 OF 2024 (T-RES)

DECEMBER 10, 2024

Shreehari, Adv. for the Petitioner. Smt. Jyoti M. Maradi, HCGP for the Respondent.

ORDER

1. A show cause notice under Section 73(1) of the Central Goods and Services Tax Act, 2017/Karnataka Goods and Services Tax Act, 2017 has been issued to the petitioner for the financial years 2019-20 and 2020-21. On the ground that respondents ought to have issued separate show cause notice for two separate years as they constitute difference cause of action, present writ petition is filed.

2. It is seen that the petitioner is having an alternative and efficacious remedy under Section 107 of the Central Goods and Services Tax Act, 2017. However, it is seen that single notice has been issued to the petitioner in respect of short payment of GST in respect of two financial years, which is erroneous.

3. For the aforementioned reasons, the writ petition is hereby dismissed reserving liberty to the petitioner to approach appropriate appellate authority in the manner known to law, and if an appeal were to be filed, the petitioner would be entitled to the benefit of Section 14 of the Limitation Act, 1963.

4. In the meanwhile, respondents are directed not to initiate any precipitative action against the petitioner for a period of thirty days from today. The appellate authority shall decide the appeal without being influenced by any of the observations made hereinabove.