Writ petition challenging GST assessment order dismissed due to availability of alternate appellate remedy,

Writ petition challenging assessment order dismissed due to availability of alternate appellate remedy, absent extraordinary circumstances.

Issue:

Whether a writ petition challenging an assessment order is maintainable when an appealable alternate remedy is available under the Central Goods and Services Tax Act, 2017/Uttar Pradesh Goods and Services Tax Act, 2017, and the assessee fails to demonstrate extraordinary circumstances to bypass this remedy.

Facts:

For the period 2017-18, a notice was issued to the assessee, alleging that claims related to high sea sales and high sea purchases were not accurately reflected in their monthly returns. The assessee filed a response and was granted an opportunity of hearing. Subsequently, an order was passed that rejected the assessee’s submissions and identified an evaded turnover of ₹77.88 crores. The assessee then filed a writ petition to contest the conclusions reached by the assessing authority in this impugned order.

Decision:

The instant writ petition was dismissed in favor of the revenue. The court observed that the impugned order was admittedly appealable. The assessee failed to provide any valid reason or indicate any extraordinary circumstances that would justify bypassing the statutory alternative remedy of appeal. The assessee merely stated that they had “no option but to approach instant court” without substantiating this claim. Consequently, the court found no grounds to entertain the writ petition when an effective statutory appeal mechanism was available.

Key Takeaways:

The existence of an effective alternate statutory remedy, such as an appeal under the CGST/UPGST Act, 2017, is a strong ground for a High Court to decline to exercise its writ jurisdiction under Article 226 of the Constitution of India.
Assessees seeking to bypass the alternate remedy must demonstrate extraordinary circumstances, such as a complete lack of jurisdiction, violation of principles of natural justice, or a challenge to the vires of a statutory provision.
Merely being aggrieved by an assessment order is generally not sufficient to invoke writ jurisdiction when an appeal mechanism is provided by statute.
Courts will typically direct parties to exhaust the prescribed statutory remedies before approaching the High Court through a writ petition.

HIGH COURT OF ALLAHABAD

APL Apollo Tubes Ltd.

Commissioner, State Tax GST, UP

Arun Bhansali, CJ.
and Kshitij Shailendra, J.

WRIT TAX No. 1099 of 2025

APRIL 17, 2025

Prakhar Shukla and R.S. Sharmafor the Petitioner. Ankur Agarwalfor the Respondent.

ORDER

1. This petition, under Article 226 of the Constitution of India, is directed against order dated 05.02.2025 passed by respondent No. 2, Joint Commissioner, Corporate Circle – II, State Tax, Ghaziabad (Annexure No. P-1).

2. The petitioner was issued notice under Section 61 of the Uttar Pradesh Goods and Services Tax Act, 2017 (‘the Act’) regarding discrepancies noticed on scrutiny of returns for the year 2017-18 on 19.04.2023. A response was filed by the petitioner on 25.05.2023, which was not found satisfactory and as such, a notice under Section 73 of the Act was issued in relation to two issues (i) Difference in relation to duty credit scrip in GSTR-1 and GSTR-3B and (ii) Amount of Rs. 77,88,28,755.17/- reflected in Column_5O in GSTR-9C pertaining to adjustments in turnover due to reasons not listed above.

3. A response to the notice under Section 73 of the Act was submitted by the petitioner, which was accepted qua issue (i) pertaining to duty credit scrip, however, in relation to issue (ii) pertaining to adjustments in turnover in Column_5O in GSTR-9C, it was found that the claim made based on high sea sale and high sea purchase were not reflected in the monthly returns or annual returns, based on which, a notice under Section 74 of the Act was issued to the petitioner. A response was filed and after providing opportunity of hearing, the response/clarification, submitted by the petitioner, was not accepted and the order impugned dated 05.02.2025 was passed indicating Rs. 77,88,28,755.17/- as evaded turnover and ordering for payment of tax, penalty and interest.

4. Several pleas have been raised in the writ petition, seeking to contest the conclusion arrived at by the Assessing Authority. All the pleas, which are sought to be raised, pertain to the merit of the order passed and essentially, seek this Court to act as an Appellate Authority qua the order impugned with reference to the material, which was placed before the Authority and has been made part of record of the present petition. Pleas pertaining to violation of principle of natural justice and lack of jurisdiction have been raised, however, the said pleas only remain in words and have not at all be substantiated.

5. The order impugned, admittedly, is appealable, however, except for indicating that the petitioner has no option but to approach this Court for exercise of constitutional right to carry on trade and business as per the law and for quashing of tax and penalty, not a word has been indicated for bypassing the alternative remedy available to the petitioner of filing appeal.

6. The parameters for exercising jurisdiction under Article 226 of the Constitution of India are well settled, wherein it can be exercised sparingly and only in exceptional circumstances despite availability of statutory remedy. Recently, Hon’ble Supreme Court in Jaipur Vidyut Vitran Nigam Ltd. v. MB Power (MP) Ltd. (2024) 8 SCC 513, after referring to the judgement in Radha Krishan Industries v. State of Himachal Pradesh [2021] 127 taxmann.com 26/86 GST 665/48 GSTL 113 (SC)/(2021) 6 SCC 771 , has laid down that though availability of an alternative remedy is not a complete bar in the exercise of power of judicial review by the High Courts, the recourse to such a remedy would be permissible only if extraordinary and exceptional circumstances are made out. It was observed that when a right is created by a statute, which itself prescribes the remedy or procedure for enforcing the right or liability, resort must be had to that particular statutory remedy before invoking the discretionary remedy under Article 226 of the Constitution of India.

7. In the present case, the petitioner has failed to point out any extraordinary and exceptional circumstance for bypassing the statutory alternative remedy. Neither there has been a failure of principles of natural justice nor it is the case of the petitioner that proceedings were without jurisdiction, which are the grounds under which the bar of statutory remedy does not come in the way of entertaining the petitions under Article 226 of the Constitution of India.

8. In view of above discussion, we do not find any reason to invoke our extraordinary jurisdiction in the present case. The petition is, therefore, dismissed, leaving it open for the petitioner to avail alternative remedy in accordance with law.