Supreme Court Upholds Dismissal Of Writ Due To Alternate Remedy But Extends Appeal Limitation

Supreme Court Upholds Dismissal Of Writ Due To Alternate Remedy But Extends Appeal Limitation

Issue

Facts

• Alert Notice & SCN: An alert notice was received regarding fraudulent availment and passing on of Input Tax Credit (ITC) by a non-existent entity, Advanta Sales. Following an investigation, a Show Cause Notice (SCN) dated June 28, 2025, was issued to the assessee alleging wrongful utilization of excess ITC amounting to ₹42.66 lakhs for FY 2018-19.
• Assessee’s Reply: The assessee filed a response stating that no manpower supply services were availed, so there was no excess ITC, and noted that supplies were received during FY 2019-20 instead.
• Issuance of Corrigendum: The revenue authorities subsequently issued a corrigendum amending the period in the SCN to cover both FY 2018-19 and FY 2019-20.
• Challenge by Assessee: The assessee contended that the corrigendum was time-barred and amounted to issuing a fresh SCN for FY 2019-20. An adjudication order was passed confirming the tax demand.
• High Court Ruling: The High Court dismissed the writ petition, holding that Sections 160 and 161 protect proceedings from minor technical defects/errors and that factual disputes over the corrigendum should be addressed through statutory appellate remedies under Section 107 rather than a writ petition.
• SLP to Supreme Court: The assessee challenged the High Court’s dismissal before the Supreme Court via a Special Leave Petition (SLP).

Decision

• Non-Interference with High Court Ruling: The Supreme Court declined to interfere with the High Court’s order dismissing the writ petition, affirming that the availability of an alternative statutory remedy under Section 107 warranted bypassing writ jurisdiction. [Paras 2 and 3] [In favour of revenue]
• Extension of Limitation Period: To prevent hardship to the assessee due to time spent in court proceedings, the Supreme Court extended the limitation period up to October 16, 2026, allowing the assessee to file an appeal before the statutory appellate authority. [Paras 2 and 3] [SLP disposed of]

Key Takeaways

1. Exhaustion of Statutory Remedies: Mere disagreement with factual or legal conclusions drawn by an adjudicating authority regarding SCN corrigendums under Sections 160 and 161 does not justify bypassing the statutory appellate mechanism under Section 107.
2. Protection under Sections 160/161: Challenges related to the scope and validity of procedural rectifications or corrigendums require factual examination, which falls within the domain of statutory appellate authorities rather than writ courts.
3. Equitable Extension of Limitation: When dismissing an SLP on the grounds of alternative remedy, the Supreme Court can extend the statutory timeline to enable the taxpayer to submit an appeal on merits without being barred by limitation.