2023 (4) TMI 705 - HC - GST

GST Order Upheld: Failure to Respond to Show Cause Notice and Miss Appeal Deadline Leads to Petition Dismissal

The HC dismissed a writ petition challenging a GST order under Section 74, finding the petitioner failed to submit a reply to a show cause notice and ... Principles of natural justice - extension of time sought for filing reply - time extended on the request of the petitioner till 20th April, 2022, but no reply was submitted by the petitioner - HELD THAT:- The time for filing reply was extended for the petitioner firstly till 28th December, 2021 but no reply was submitted, thereafter, it was again extended on the request of the petitioner till 20th April, 2022, but no reply was submitted by the petitioner. In the interregnum, on 8th January, 2022 without submitting any reply, he had sought personal hearing. Petitioner's counsel says that certain documents were being demanded by him which were not supplied. If it is so, then all this can be seen in appeal u/s 107. We could understand if a reply was submitted by the petitioner and in such reply the petitioner took the plea about non-furnishing of certain documents and at the same time exercised his option for personal hearing, which is referable to Section 75(4) of the Act, 2017. In such a case, of-course we may have interfered but we see no reason to interfere at the behest of petitioner, who did not submit any reply but sought personal hearing. None of decisions annexed with the petition apply to the facts of this case. However, at this stage, Shri Rohit Shukla informed that against the order dated 21.05.2022 passed u/s 74 of the Act, 2017, the appeal could have been filed within a period of 30 days, which was extendable for one month and no more. We find that this petition has been filed only on 21st March, 2023, meaning thereby the period for preferring the appeal had expired much prior to filing of this petition - Writ petition is dismissed. 1. ISSUES PRESENTED AND CONSIDERED Whether the writ jurisdiction under Article 226 can be exercised to challenge an order passed under Section 74 of the GST Act where a statutory appeal under Section 107 was available but not filed within the prescribed period. Whether the impugned order suffers from violation of principles of natural justice because the show cause notice did not specify date/time/venue for personal hearing and the petitioner purportedly sought personal hearing but did not file any substantive reply within the prescribed/extended periods. Whether the petitioner's conduct - requesting personal hearing without filing a reply and failing to avail the appellate remedy within time - warrants interference by the Court or amounts to an abuse of process. 2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Exercise of writ jurisdiction (Article 226) when statutory appeal under Section 107 exists and appeal period has expired. Legal framework: Article 226 is an extraordinary constitutional remedy exercised sparingly where no alternate efficacious remedy exists; statutory appeals (here Section 107) are ordinarily the appropriate remedy to challenge quasi-judicial/administrative orders. Precedent Treatment: The Court observed that decisions annexed by petitioner do not apply to the facts; the judgment distinguishes any cited authority as inapplicable rather than expressly overruling any binding precedent. Interpretation and reasoning: Where a statutory appeal was available and the appellate period (30 days, extendable by one month) had elapsed prior to filing of the writ petition, the petitioner cannot convert an appeal grievance into a writ petition. The Court treated the availability and expiry of the appellate remedy as critical-permitting a writ in lieu of an appeal after the appeal period has expired would circumvent statutory timelines and remedies. Ratio vs. Obiter: Ratio - A writ under Article 226 will not be routinely exercised where a statutory appeal exists and the appellant allowed the period for that appeal to lapse; such post-facto invocation of writ jurisdiction constitutes abuse of process. Obiter - Observations about the precise extendability window (30 days plus one month) are explanatory of the statutory scheme. Conclusion: The Court declined to exercise extraordinary writ jurisdiction and dismissed the petition as an abuse of process because the statutory appeal window had expired before filing the petition. Issue 2: Alleged breach of natural justice - adequacy of show cause notice and exercise of right to personal hearing without filing substantive reply. Legal framework: Section 74 and Section 75(4) of the GST Act govern issuance of show cause notices, the right to reply, and personal hearing; principles of natural justice require meaningful opportunity to be heard - i.e., an opportunity to present a substantive response and, where relevant, to seek personal hearing. Precedent Treatment: Attached decisions relied upon by petitioner were found inapplicable; the Court did not apply any particular precedent to disturb the order on natural justice grounds. Interpretation and reasoning: The show cause notice specified the last date for submission of reply but did not set a date/time/venue for personal hearing in the table. The petitioner failed to file any substantive reply by the initial or extended dates. A subsequent online entry (8 January 2022) ticked the option for personal hearing and sought extension of time but did not furnish a reply. The Court reasoned that if a substantive reply had been filed raising non-furnishing of certain documents and simultaneously requesting personal hearing (referable to Section 75(4)), interference might have been considered. Absent any substantive reply, mere ticking of the personal hearing option without articulating grounds or seeking specific relief did not amount to a meaningful exercise of the right to be heard sufficient to vitiate the final order. Ratio vs. Obiter: Ratio - Failure to file a substantive reply or to pursue the statutory appellate remedy precludes interference on natural justice grounds where the record shows no meaningful invocation of the personal hearing right. Obiter - Suggestion that issues about non-furnishing of demanded documents could be ventilated in the statutory appeal if it were timely prosecuted. Conclusion: The Court found no ground to interfere on natural justice grounds because the petitioner did not submit any substantive reply while relying on a mere request for personal hearing; any complaint about non-furnishing of documents could be addressed in the appeal (which, however, was not filed timely). Issue 3: Allegation of abuse of process through invocation of writ jurisdiction after expiry of appeal period and absence of substantive engagement with the show cause process. Legal framework: Courts guard against misuse of constitutional remedies where statutory routes are available and the litigant has not availed them; doctrine of abuse of process prevents circumvention of statutory time limits and remedies. Precedent Treatment: The Court characterized the petition as constituting an abuse of process in light of the elapsed appeal period and the petitioner's procedural conduct; no contrary precedents were applied. Interpretation and reasoning: The sequence - non-filing of reply by initial and extended dates, a belated request for personal hearing without substantive response, a final order under Section 74, and filing of the writ long after the statutory appeal period had lapsed - led the Court to conclude that the petitioner sought to use writ jurisdiction to remedy a self-created loss of appellate rights. The Court emphasized that relabeling an appeal grievance as a writ petition after expiry of appeal time frustrates statutory intent and judicial economy. Ratio vs. Obiter: Ratio - Post-expiry invocation of writ jurisdiction where a statutory appeal was available and not availed is an abuse of process and grounds for dismissal. Obiter - The Court's comment that issues about non-furnished documents could have been raised in timely appeal is instructive but contingent on the availability of the statutory remedy. Conclusion: The petition was dismissed on the ground of abuse of process; the Court declined to exercise discretionary writ jurisdiction given the availability of the appellate remedy and the petitioner's failure to timely pursue it.