Writ petition dismissed, assessee directed to avail appellate remedy for tax liability dispute due to non-submission of agreements.

Issue:

Whether a writ petition is maintainable when an assessee challenges a tax imposition order, claiming exemption, but failed to submit relevant agreements during the assessment, and an alternate appellate remedy is available under Section 107 of the CGST/BGST Act, 2017.

Facts:

The assessee was subject to an order imposing tax liability. The assessee contended that the entire contracts undertaken by them were exempt from tax as per Notification No. 25 of 2012-ST, dated June 20, 2012. However, it was conceded that along with their objections, no agreements pertaining to these contracts were submitted to the assessing authority. Consequently, the assessing authority was unable to consider whether the claimed exemption was applicable. The assessee subsequently filed a writ petition against the tax imposition order.

Decision:

The writ petition was disposed of, and the assessee was directed to avail the alternate appellate remedy available under Section 107 of the Central Goods and Services Tax Act, 2017/Bihar Goods and Services Tax Act, 2017. The court specifically instructed that if the appeal was filed by the assessee within one month, it should be accepted without reckoning any delay, and the appeal should be considered on its merits. The decision was in favor of the revenue, as the High Court declined to exercise its writ jurisdiction and instead directed the assessee to pursue the statutory appeal.

Key Takeaways:

The availability of an effective alternate remedy, such as an appeal under Section 107 of the CGST/BGST Act, 2017, will generally preclude the exercise of writ jurisdiction by the High Court.
It is crucial for assessees to submit all necessary supporting documents, such as agreements, during the assessment proceedings to enable the assessing authority to properly consider claims for exemption.
Failure to provide relevant documents at the assessment stage may weaken the assessee’s position in writ proceedings and lead to a direction to pursue statutory appeals.
Courts may grant a grace period for filing an appeal when a writ petition is dismissed on the grounds of alternate remedy, ensuring that the assessee is not prejudiced by the time spent in writ proceedings.

HIGH COURT OF PATNA

Krishna Kant Thakur

Union of India

K. Vinod Chandran and Partha Sarthy, JJ.

Civil Writ Jurisdiction Case No.1709 of 2024

OCTOBER 24, 2024

Kumar Kaushik, Adv. for the Petitioner. K.N. Singh, ASG, Anshuman Singh, Sr. SC, Devansh Shankar Singh, Shivaditya Dhari Sinha, Advs. for the Respondent.

ORDER

K. Vinod Chandran, J. – The petitioner is aggrieved with Annexure-P8, by which he was imposed with the liability to tax under the C.G.S.T Act.

2. The petitioner’s contention is that the entire contracts carried on by him are exempted as per Annexure-P9 Notification bearing No. 25 of 2012- Service Tax dated 20.06.2012. However, the order itself indicates that there was no agreement produced by the petitioner along with the objection. The learned Counsel for the petitioner submits that the agreements were submitted by a separate e-mail.

3. In any event, it is admitted that along with the objections no agreements were submitted, in which circumstance, the Assessing Authority was disabled from considering whether the exemption is available or not. Since the consideration is based on the agreements, we are of the opinion that the petitioner should avail the appellate remedy, as is available under Section 107 of the B.G.S.T Act. If an appeal is filed within one month from today, we direct that the appeal be accepted without reckoning the delay and the same considered on merits.

4. We make it clear that we have not made any observation on merits of the matter.

5. The writ petition stands disposed of with the above directions.