Tax Authority's Jurisdiction Under GST Act Section 74(9) Questioned; Court Grants Conditional Stay Pending Final Hearing

The HC ruled on a challenge to an order passed under Section 74(9) of the State GST Act by the Deputy Commissioner of Revenue. Despite the respondent's objection regarding alternative remedies, the court held that questions of jurisdiction warranted judicial review through writ jurisdiction. The court found the petitioner established a prima facie case regarding the officer's jurisdiction under the State GST Act. A conditional stay was granted, requiring the petitioner to deposit 10% of the demanded amount within ten days to prevent coercive recovery actions. The matter was scheduled for final hearing after ten weeks.

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Issues: Jurisdiction under State GST Act, Maintainability of writ petition, Alternative remedy available

Jurisdiction under State GST Act:
The petitioner challenged an order passed by the Deputy Commissioner of Revenue, Directorate of Revenue Intelligence and Enforcement under Section 74(9) of the State GST Act, claiming it was without jurisdiction. The respondent defended the jurisdiction citing Sections 4 and 5 of the State GST Act and relevant notifications. The petitioner relied on a specific notification dated 12th February, 2019. The court noted that the issue involved the jurisdiction of the officer acting under the State GST Act, and since interpretation of various legal provisions and notifications was necessary, the writ petition could not be dismissed solely on the availability of an alternative remedy. The court found that the petitioner had made a prima facie case regarding the jurisdiction of the officer concerned.

Maintainability of writ petition:
The respondent raised the issue of maintainability of the writ petition, arguing that an alternative remedy through an appellate forum was available. However, the court held that the availability of an alternative remedy did not bar the writ court from entertaining the petition, especially when the question of jurisdiction was at stake, or there was a violation of natural justice or constitutional validity of a legal provision. The court emphasized that the writ petition had to be heard and decided on its merits, particularly when the issue of jurisdiction was in question.

Conditional Stay and Interim Order:
The court granted a conditional stay of the impugned order dated 3rd March, 2022, subject to the petitioner depositing 10% of the demand within ten days. If the payment was made within the stipulated time, no coercive action would be taken against the petitioner for recovery of the demand. The court scheduled the matter for final hearing after ten weeks, allowing the respondents to file an affidavit-in-opposition within four weeks and the petitioner to file a reply within two weeks thereafter. The court found that the petitioner had established a case for an interim order based on the circumstances presented.

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