2023 (11) TMI 204 - HC - GST

GST Demand Notice Upheld: Appellant's Challenge Rejected Due to Missed Statutory Appeal Deadline and Portal Service

S.K. ELDHOSE Versus STATE TAX OFFICER, STATE GST DEPARTMENT, MATTANCHERRY

The HC dismissed the appellant's writ petition challenging a GST demand notice. The court held that the assessment order was validly served through the ... Validity of demand notice issued under the Revenue Recovery Act - SCN not served with any assessment order - HELD THAT:- The statutory period of limitation for preferring an appeal is three months from the date of communication of the order, with a further period of one month towards condonation of delay, if any. The appellant, not having availed the alternate remedy under the statute, cannot feign ignorance of the statutory scheme under the GST Act, which accords a finality to those orders that have not been appealed against. The said statutory scheme of finality is not one that the learned Single Judge could have ignored either while considering whether or not to entertain the Writ Petition. This settled position in law has been reiterated in Assistant Commissioner (CT) LTU, Kakinada and Others v. Glaxo Smith Kline Consumer Health Care Limited [2020 (5) TMI 149 - SUPREME COURT] as also in Oil and Natural Gas Corporation Limited v. Gujarat Energy Transmission Corporation Limited and Others [2017 (3) TMI 1628 - SUPREME COURT]. In the former decision, it was clearly held that even though the High Court can entertain a Writ petition against any order or direction passed or action taken by the State under Article 226 of the Constitution, it ought not to do so as a matter of course when the aggrieved person could have availed of an effective alternative remedy in the manner prescribed by law. Taking note of the said settled position of law and finding that all that the learned Single Judge did was to follow the said dictum while dismissing the Writ Petition, there are no reason to interfere with the judgment of the learned Single Judge - appeal dismissed. ISSUES PRESENTED AND CONSIDERED 1. Whether a writ petition under Article 226 is maintainable challenging a revenue recovery/demand order arising from a GST assessment when the aggrieved person has an effective statutory appellate remedy under the GST Act. 2. Whether communication of an assessment order by uploading/intimation on the GST portal amounts to service/communication for the purpose of triggering the period of limitation for filing an appeal under the GST Act. 3. What is the applicable limitation for preferring an appeal against an assessment order under the GST statutory scheme and whether the availability of a one-month condonation period affects the propriety of entertaining constitutional relief. ISSUE-WISE DETAILED ANALYSIS Issue 1: Maintainability of writ when effective statutory alternative remedy exists Legal framework: The GST statutory scheme provides a specific appellate remedy against assessment orders. Article 226 jurisdiction is available but is to be exercised with regard to the availability and efficacy of alternate remedies provided by statute. Precedent Treatment: The Court followed settled precedents establishing that High Courts should not ordinarily entertain writs where an effective, efficacious, and alternative statutory remedy exists and can be availed of by the aggrieved person. Interpretation and reasoning: The Court observed that the statutory scheme of the GST Act accords finality to orders that are not appealed within the prescribed timeframe. Where an appeal remedy is available and effective, interfering by way of writ would circumvent the statutory route and upset the finality designed by the legislature. The Single Judge's dismissal of the writ petition rested on this principle of restraint. Ratio vs. Obiter: Ratio - It is not appropriate to entertain a writ under Article 226 as a substitute for a statutory appeal where an effective alternative remedy exists under the GST Act. Conclusions: The Court affirmed that the availability of a statutory appeal renders the writ petition unsustainable; the Writ Appeal fails for want of maintainability on this ground. Issue 2: Communication by GST portal as valid service triggering limitation Legal framework: Service/communication of assessment orders under the GST Act can be effected in the manner prescribed by the statute, including electronic communication via the GST portal. Precedent Treatment: The Court relied on statutory provisions and judicial authority holding that communication by electronic means prescribed by the statute constitutes valid service for triggering statutory timelines. Interpretation and reasoning: The appellant's plea of non-receipt was rejected because the assessment order had been communicated in the manner prescribed - by uploading/intimation on the GST portal. The Court treated such communication as effective notice, thereby starting the clock for filing an appeal. Ratio vs. Obiter: Ratio - Communication of assessment orders through the GST portal, where prescribed by statute, constitutes valid service/communication for all purposes including commencement of limitation for appeal. Conclusions: The Court concluded that the appellant was duly communicated the assessment order via the GST portal and thus was obliged to file an appeal within the statutory period; non-receipt by other means did not render the communication invalid. Issue 3: Applicable limitation for filing an appeal and effect of condonation period on availability of writ relief Legal framework: The GST Act prescribes a limitation period of three months from the date of communication of the order for preferring an appeal, with an additional one month available for seeking condonation of delay, effectively a four-month window. Precedent Treatment: The Court applied the statutory limitation regime and adhered to authorities emphasizing that the existence of such limitation and condonation provisions are part of the statutory scheme promoting finality. Interpretation and reasoning: Given that the assessment order was communicated on the GST portal and the appellant did not avail the statutory appeal or seek condonation within the prescribed period, the Court held that the statutory alternative remedy had been lost by inaction. The statutory finality cannot be ignored by invoking Article 226 where the time-barred remedy was available but not pursued. Ratio vs. Obiter: Ratio - The three-month appeal period plus one month for condonation is the applicable limitation; failure to pursue these remedies ordinarily precludes relief by writ. Conclusions: The Court concluded that because the appellant failed to file a statutory appeal or seek condonation within the prescribed period, the writ petition challenging the demand could not be entertained. Cross-reference The conclusions on Issues 1-3 are interrelated: valid communication via the GST portal (Issue 2) triggered the statutory limitation (Issue 3), and the existence of that effective, time-limited statutory remedy rendered the writ petition impermissible as a substitute remedy (Issue 1). Overall Conclusion The Court upheld the Single Judge's approach that where an assessment order is communicated in accordance with the statute via the GST portal and the aggrieved party fails to avail the prescribed appellate remedy within the statutory period (including condonation), the High Court should not entertain a writ petition seeking to challenge the demand; the writ appeal was therefore dismissed.