2023 (6) TMI 447 - HC - GST

Tax Assessment Dispute Rejected: Procedural Lapses and Missed Statutory Timelines Nullify Input Tax Credit Claim Under Section 107

Badri Prasad Yadav Son of Sukhdev Prasad Yadav Versus The State of Bihar, The Additional Commissioner of State Taxes, Saharsa Circle, Saharsa, The Assistant Commissioner of State Taxes Patliputra Circle, Saharsa

The SC dismissed the writ petition challenging a tax assessment order due to procedural non-compliance. The petitioner failed to file an appeal within the ... Appeal dismissed on account of the delay in filing the same - Wrongful claim of input tax credit - HELD THAT:- The Hon’ble Supreme Court in IN RE: COGNIZANCE FOR EXTENSION OF LIMITATION [2021 (3) TMI 497 - SC ORDER]. Therein, due to the pandemic situation limitation was saved between 15.03.2020 till 28.02.2022. It was also directed that an appeal could be filed within ninety days from 01.03.2022. Hence, an appeal could have been filed on or before 29.05.2022, which provision was not availed by the petitioner herein. The Hon’ble Supreme Court also declared that if a longer period than 90 days is provided in a Statute, then that longer period will apply. In the BGST Act, u/s 107(4) there is a provision for condonation of delay, if the appeal is filed delayed, within one month of expiry of limitation. Even if that be deemed to be appealable then the appeal ought to have been filed by 28.06.2022. The appeal is said to have been filed only on 02.09.2022, after 65 days from the date on which even the limitation period as stipulated by the Hon’ble Supreme Court, expired. The contours of the jurisdiction under Article 226 of the Constitution of India to interfere with appellable orders laid down by the Hon’ble Supreme Court in STATE OF HP. AND OTHERS VERSUS GUJARAT AMBUJA CEMENT LTD. AND ANOTHER (AND OTHER APPEALS) [2005 (7) TMI 353 - SUPREME COURT]. It has been held that if an assessee approaches the High Court without availing the alternate remedy, it should be ensured that the assessee has made out a strong case or that there exists good grounds to invoke the extraordinary jurisdiction. While reiterating that Article 226 of the Constitution confers very wide powers on the High Court, it was clarified that nonetheless the remedy of writ is an absolutely discretionary remedy. The High Court, hence, can always refuse the exercise of discretion if there is an adequate and effective remedy elsewhere. The claim of Input Tax Credit and the computation thereon ought to have been agitated before the appellate authority. Having not availed the statutory remedies available, the petitioner cannot seek to approach this Court under Article 226 of the Constitution of India to challenge an assessment order especially with respect to the computation of the turn over and the determination of the taxable turnover and the tax payable, as arrived at by the Assessing Officer. In the BGST Act, an appellate remedy is provided under Section 107, which has to be availed within a period of three months or with a delay within a further period of one month - It is trite law that when there is a specific period for delay condonation provided, there cannot be any extension of the said period by the Appellate Authority or by this Court under Article 226 of the Constitution. The petitioner by his own failure has not availed the appellate remedy and in that circumstance, there can be no invocation of the extraordinary jurisdiction under Article 226 of the Constitution of India - there is no jurisdictional error, violation of principles of natural justice or abuse of process of Court averred or argued by the petitioner in the above writ petition. Petition dismissed. Issues:The judgment involves issues related to dismissal of appeal due to delay in filing, wrongful claim of input tax credit, expansion of scope of litigation, distinction between transitional credit and input tax claimed, applicability of judgment on transitional credit, delay in filing appeal, jurisdiction under Article 226 of the Constitution, availability of statutory remedies, and invocation of extraordinary jurisdiction.Dismissal of Appeal due to Delay in Filing:The petitioner was aggrieved by the dismissal of the appeal on the grounds of delay in filing, which was beyond the stipulated time period as per the BGST Act. Despite provisions for condonation of delay, the appeal was filed late, and the Hon'ble Supreme Court's directions regarding limitation were not adhered to. The judgment emphasized the importance of timely filing of appeals and the consequences of failing to do so.Wrongful Claim of Input Tax Credit:The petitioner admitted to a wrongful claim of input tax credit in the assessment year 2020-21 due to the supplier not paying the relevant tax to the department. This admission played a crucial role in the assessment order and subsequent dismissal of the appeal. The judgment highlighted the significance of accurate tax claims and the repercussions of erroneous filings.Jurisdiction under Article 226 of the Constitution:The judgment discussed the limitations of invoking Article 226 of the Constitution to challenge an assessment order, especially when statutory remedies such as the appellate authority under Section 107 of the BGST Act are available. It emphasized that the High Court's discretionary powers should be exercised judiciously, considering the availability of alternate remedies and the absence of jurisdictional errors or violations of natural justice.Invocation of Extraordinary Jurisdiction:The petitioner's attempt to challenge the demand based on the input tax credit claim through a writ petition under Article 226 was deemed inappropriate. The judgment underscored that matters concerning tax computation and assessment should be addressed through statutory appellate remedies rather than through extraordinary jurisdiction. The petitioner's failure to avail the appellate remedy within the prescribed period was a critical factor in the dismissal of the writ petition.Conclusion:Ultimately, the writ petition was dismissed due to the petitioner's failure to avail the statutory appellate remedy within the specified timeframe. The judgment reiterated the importance of adhering to legal procedures, timely filing of appeals, and utilizing available remedies before seeking extraordinary jurisdiction under Article 226 of the Constitution.