SC Disposes SLP; Assessee’s Non-Participation in ITC Fraud Proceedings Unjustified.
Issue
Whether a High Court should exercise its writ jurisdiction to quash an adverse assessment order when the assessee, despite being aware of the proceedings, deliberately chose not to participate by neither filing a reply nor attending the personal hearing.
Facts
- The assessee was alleged to have fraudulently availed Input Tax Credit (ITC) based on bogus invoices from dummy and non-existent firms.
- The assessee was aware of the investigation but failed to file a reply to the show-cause notice.
- The assessee also did not attend the personal hearing, later citing the suspension of their GST registration as the reason for their non-participation.
- The High Court dismissed the assessee’s writ petition, finding their conduct to be “callous and non-cooperative” and a deliberate choice to skip the adjudication process.
- The High Court also confirmed that the order was passed within the statutory limitation period.
- While dismissing the writ, the High Court granted the assessee a final opportunity to file a statutory appeal by a new extended deadline (31 October 2025).
- The assessee filed a Special Leave Petition (SLP) in the Supreme Court challenging the High Court’s dismissal.
Decision
- The Supreme Court disposed of the Special Leave Petition, finding no reason to interfere with the High Court’s judgment.
- The High Court’s order, which was upheld, dismissed the writ petition and refused to quash the assessment order.
- The High Court’s decision to grant the assessee liberty to file a time-barred statutory appeal was maintained as the appropriate remedy.
Key Takeaways
- Writ Jurisdiction is Not for Non-Cooperative Taxpayers: A High Court will not use its extraordinary writ jurisdiction to protect a taxpayer who has deliberately refused to participate in the statutory adjudication process (i.e., not filing a reply or attending a hearing).
- Invalid Excuses: A suspended GST registration is not a valid excuse to ignore a show-cause notice or a hearing, especially one concerning allegations of fraud.
- Appeal is the Proper Remedy: The courts affirmed that the statutory appeal mechanism is the proper forum for challenging an order on its merits. A writ petition cannot be used to bypass this process.
- Final Opportunity (Grace of the Court): Despite the assessee’s “callous” conduct, the High Court provided a final, equitable remedy by granting a fresh window to file the time-barred statutory appeal, directing that the delay be considered sympathetically.