2019 (12) TMI 836 - HC - GST

Kerala High Court upholds GST assessment orders, stresses on statutory appeal authority

SRI KUBERA CONSTRUCTIONS PVT. LTD. Versus STATE OF KERALA, PRINCIPAL SECRETARY TO GOVERNMENT OF KERALA, STATE GOODS AND SERVICES TAX DEPARTMENT, COMMISSIONER OF STATE GOODS AND SERVICES TAX, ASSISTANT COMMISSIONER OF STATE TAX, INSPECTING ASSISTANT COMMISSIONER, SGST DEPARTMENT, STATE TAX OFFICER, KERALA STATE IT INFRASTRUCTURE LTD., MANAGING DIRECTOR, KERALA STATE IT INFRASTRUCTURE LTD.

The High Court of Kerala dismissed the challenge against assessment orders under the Central Goods and Services Tax Act, 2017, emphasizing the ... Validity of assessment order - recovery of amounts - In the writ petition, it is its case that the assessments have been concluded against it without taking note of the returns filed by it, which would have indicated the extent of the turn over that could have been subjected to assessment. Contrary to this, the assessments have been completed by relying on past assessments of the petitioner, thereby resulting in an exaggerated demand against the petitioner - HELD THAT:- Exts.P24 and P25 orders have been passed in terms of Section 62 of the CGST Act, after finding that the petitioner had not furnished the necessary returns within the time contemplated under the Act for filing the same. It was therefore that the assessments were completed on best judgment basis as against the petitioner. It is also found from the assessment orders impugned that, had the petitioner availed the opportunity of furnishing the returns within a period of 30 days from the date of the aforesaid assessment orders, the assessment would have been automatically withdrawn and the petitioner would have obtained a fresh opportunity to produce the relevant material for the purposes of a proper assessment. The said facility was not, however, availed by the petitioner for reasons best known to it. The only alternative for the petitioner is to approach the statutory Appellate Authority through an appeal against Exts.P24 and P25 assessment orders. The challenge in the writ petition against Exts.P24 and P25 orders cannot be maintained in view of the availability of an effective alternate remedy against the assessment orders impugned herein because the assessment orders do not suffer from any jurisdictional error or violation of the rules of natural justice - recovery steps for recovery of amounts confirmed against the petitioner by Exts.P24 and P25 assessment orders shall be kept in abeyance for a period of three weeks so as to enable the petitioner to move the Appellate Authority through an appeal against Exts.P24 and P25 assessment orders in the mean while. Issues:1. Challenge against assessment orders under the Central Goods and Services Tax Act, 2017.2. Validity of assessments completed on best judgment basis.3. Availability of alternate remedy through statutory Appellate Authority.4. Direction to keep recovery steps in abeyance pending appeal.Analysis:1. Challenge against assessment orders under the Central Goods and Services Tax Act, 2017:The petitioner, a company, challenged the assessment orders Exts.P24 and P25 passed against it under the Central Goods and Services Tax Act, 2017. The petitioner contended that the assessments were conducted without considering the returns filed by them, leading to an exaggerated demand. Additionally, a notice (Ext.P27) was issued for coercive recovery of the amounts confirmed in the assessment orders.2. Validity of assessments completed on best judgment basis:The Court observed that the assessments were carried out under Section 62 of the CGST Act due to the petitioner's failure to furnish necessary returns within the stipulated time. The orders were based on best judgment since the petitioner did not avail the opportunity to submit returns within 30 days of assessment, which would have allowed for a fresh assessment based on relevant material. The Court found no jurisdictional error or violation of natural justice in the assessment orders.3. Availability of alternate remedy through statutory Appellate Authority:The Court held that since the petitioner had the option to appeal the assessment orders before the statutory Appellate Authority, the challenge in the writ petition against Exts.P24 and P25 orders was not maintainable. The Court emphasized the importance of utilizing the appellate process to address grievances regarding assessments rather than seeking relief through a writ petition.4. Direction to keep recovery steps in abeyance pending appeal:Considering the petitioner's request for time to appeal to the Appellate Authority and the immediate threat of coercive recovery, the Court directed to stay recovery steps for three weeks. This temporary relief aimed to provide the petitioner with an opportunity to pursue the statutory appeal process while ensuring no immediate coercive actions were taken for recovery of the assessed amounts.In conclusion, the High Court of Kerala dismissed the challenge against the assessment orders, highlighting the availability of the statutory Appellate Authority as the appropriate recourse for addressing grievances related to tax assessments under the CGST Act. The Court provided a temporary stay on recovery steps to facilitate the petitioner's appeal process.