Section 73 GST order denying Input Tax Credit upheld as writ petition dismissed for available statutory appeal remedy

The HC dismissed the writ petition challenging an order under Section 73 of GST Act denying Input Tax Credit. The court held that since a statutory appeal remedy was available under Section 107 of C-GST Act, the writ petition was not maintainable due to the alternative remedy rule. Following SC precedent in Greatship case, which reiterated the alternate remedy principle in fiscal law statutes, the court ruled that petitioner must pursue the statutory appeal route subject to limitation and pre-deposit requirements rather than seeking writ relief.

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Issues:
Challenge to an order under Section 73 of the Central Goods and Services Tax Act, 2017 without a Show Cause Notice (SCN) and perfunctory handling of objections in response to a notice under Section 61 of the Act.

Analysis:
1. The petitioner challenged an order dated 06.09.2021 under Section 73 of the Central Goods and Services Tax Act, 2017 (C-GST Act) for lack of a Show Cause Notice (SCN) as required by subsection (2) of Section 73. The petitioner's objections in response to the notice under Section 61 of the C-GST Act were allegedly perfunctorily dealt with without dispositive reasoning.

2. The Revenue counsel pointed out that a notice was issued to the taxable person before the impugned order, and the petitioner was given a personal hearing despite not attending on 24.06.2021 and 08.07.2021. The petitioner disputed the claim of being put on notice for a personal hearing, leading to a factual dispute.

3. The petitioner also argued that the reply to the notice under Section 61 was not satisfactorily addressed. The Court acknowledged this as a valid ground for appeal and highlighted the availability of a statutory appeal under Section 107 of the C-GST Act.

4. The judgment emphasized the principle of alternate remedy rule, citing various legal precedents like Dunlop India case, Satyawati Tondon case, Commercial Steel case, K.C. Mathew case, and State of Maharashtra v. Greatship (India) Limited. The Court reiterated that the alternate remedy rule is a discretionary self-imposed restraint, especially in matters involving fiscal law statutes.

5. The Court clarified that while the alternate remedy rule is not absolute, it should be exercised with caution, especially in cases concerning recovery of public dues or taxes. The judgment highlighted the need to exhaust statutory remedies before seeking relief under Article 226 of the Constitution.

6. Ultimately, the Court dismissed the writ petition and the Writ Miscellaneous Petition (WMP) while preserving the petitioner's right to avail the statutory appeal remedy under Section 107, subject to limitations and pre-deposit requirements. The Court emphasized that the Appellate Authority should consider the appeal independently and in accordance with the law, unaffected by the writ petition's outcome.

Conclusion:
The judgment addressed the issues raised by the petitioner regarding the lack of a Show Cause Notice and the perfunctory handling of objections under the C-GST Act. It underscored the importance of exhausting alternate statutory remedies before approaching the Court under Article 226, ultimately dismissing the writ petition but allowing the petitioner to pursue the statutory appeal remedy under Section 107.

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