Writ petition dismissed for challenging best judgment assessment after failing to file timely appeal under RGST Act 2017

HC dismissed writ petition challenging best judgment assessment under RGST Act, 2017. Petitioner failed to file return within prescribed/extended period, did not appeal assessment order, and allowed it to become final before filing writ petition. Court held petition not maintainable citing Glaxo Smith Kline precedent, finding no violation of natural justice as proper notice was given. Petitioner's challenge based on belatedly filed return was unsustainable when statutory appeal remedy was available but not utilized.

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ISSUES PRESENTED AND CONSIDERED

1. Whether a writ petition under Article 226 is maintainable to assail a best-judgment assessment under Section 62 of the RGST Act, 2017 when the assesseee failed to file the statutory appeal within the prescribed or extended period.

2. Whether a belatedly filed return in Form GSTR-3B (filed after notice under Section 46 and after best-judgment assessment) displaces or renders invalid a prior best-judgment assessment made under Section 62.

3. Whether best-judgment assessment under Section 62, made after issuance of notice under Section 46 for non-filing under Section 39, violates principles of natural justice when conducted without affording an opportunity and without collecting further information.

4. Whether attachment of bank accounts pursuant to recovery measures can be challenged in writ jurisdiction where the underlying assessment stood unchallenged by statutory appeal and the assesseee remained in default.

ISSUE-WISE DETAILED ANALYSIS

Issue 1: Maintainability of writ under Article 226 when statutory appeal was not pursued

Legal framework: Article 226 of the Constitution; statutory appellate remedy under the RGST Act, 2017 (appeal provisions and limitation periods analogous to those governing tax appeals); principles limiting exercise of writ jurisdiction where efficacious statutory remedies exist.

Precedent Treatment: The Court applied and followed the binding pronouncement of the Supreme Court that a writ challenging an assessment cannot be entertained where the assesseee allowed the statutory appellate remedy to become foreclosed by delay and did not adequately seek condonation of delay.

Interpretation and reasoning: The Court observed that the assesseee received notice, failed to file return within the 15-day period under Section 46, did not file appeal against the best-judgment assessment within the statutory period nor within any extended/condoned period, and thereby allowed the assessment to become final. Given the availability of an efficacious statutory remedy (appeal), the assesseee's recourse to writ jurisdiction after exhausting limitation was impermissible. The Court emphasized that the remedy of appeal is creature of statute and, if not availed within time or not satisfactorily explained, the High Court ought not to supplant the appellate forum by entertaining a writ petition.

Ratio vs. Obiter: Ratio - Where an assesseee fails to avail the statutory appeal within the prescribed or extended period and does not satisfactorily explain the delay, a writ under Article 226 challenging an assessment is not maintainable. Obiter - Observations on discretionary aspects of indulgence when delay is satisfactorily explained.

Conclusions: The writ petition was not maintainable and was liable to be dismissed at the threshold because the assesseee failed to pursue or justify non-pursuit of the statutory appellate remedy.

Issue 2: Effect of belated filing of Form GSTR-3B on a prior best-judgment assessment

Legal framework: Section 39 (filing of returns), Section 46 (notice to file return), Section 62 (best-judgment assessment) of the RGST Act, 2017; concept of self-assessment vs. assessment by authority.

Precedent Treatment: The Court treated relevant precedents (including binding Supreme Court authority) as supporting the proposition that statutory procedural remedies should be pursued to challenge assessments and that belated compliance does not automatically unsettle a concluded assessment where statutory remedies remain unexhausted.

Interpretation and reasoning: The Court noted that the belated return filed by the assesseee after best-judgment assessment did not, by itself, invalidate the assessment, particularly where the assesseee remained a persistent defaulter who had ignored a specific 15-day notice. The Court reasoned that disputes as to factual tax liability, including alleged discrepancies between the assessment figures and the belated return, were matters to be agitated before the appellate forum; filing a return belatedly did not automatically displace an assessment that had become final in the absence of a timely appeal.

Ratio vs. Obiter: Ratio - A belatedly filed return does not automatically render a prior best-judgment assessment void where the assesseee allowed the statutory appellate remedy to lapse. Obiter - Observations on the effect of figures stated in a belated return on challenge to assessment (not adjudicated on merits given dismissal on maintainability).

Conclusions: The assesseee could not rely on the belated return to challenge the best-judgment assessment in writ jurisdiction after failing to avail the statutory appeal; factual disputes on tax liability should have been raised in appeal.

Issue 3: Compliance with principles of natural justice in best-judgment assessment under Section 62

Legal framework: Section 62 (best-judgment assessment) read with procedural obligations under the RGST Act, 2017; principles of natural justice (audi alteram partem) applicable to assessment proceedings.

Precedent Treatment: The Court acknowledged established principles that best-judgment assessments are permissible where returns are not filed and that procedural fairness must be judged in context; however, where remedy of appeal exists and is not availed, relief in writ jurisdiction is generally inappropriate.

Interpretation and reasoning: The Court found that the assesseee was repeatedly negligent in filing the return despite notice. Given that best-judgment assessment is statutorily provided for non-filers and was triggered by the assesseee's default, the Court held that the assesseee could not complain of violation of natural justice in writ jurisdiction when statutory appellate remedies were available and not pursued. The Court did not undertake a merits adjudication of whether the assessment process complied with all facets of natural justice, because the petition was dismissed on maintainability grounds.

Ratio vs. Obiter: Ratio - A contention of breach of natural justice in assessment proceedings is not ordinarily a ground for entertaining a writ when the assesseee failed to pursue the statutory appellate remedy; the question of procedural fairness is for the appellate authority if invoked in time. Obiter - Specific factual sufficiency of notice and opportunity in the impugned assessment was not finally decided.

Conclusions: The assesseee's complaint of violation of principles of natural justice could not sustain a writ attack given the failure to appeal; therefore the contention was not entertained on merits.

Issue 4: Challenge to attachment of bank accounts where assessment was not appealed

Legal framework: Recovery and attachment provisions under the RGST Act, 2017; interplay between finality of assessment and recovery measures.

Precedent Treatment: The Court followed doctrinal principles that recovery actions flow from an assessment which, if not timely challenged, attains finality; challenges to recovery are ordinarily appropriate only after exhausting statutory remedies unless exceptional circumstances exist.

Interpretation and reasoning: The Court noted that attachment followed issuance of recovery notices consequent to the best-judgment assessment which had not been appealed. Since the assesseee had available statutory remedies and did not pursue them, the Court declined to entertain the challenge to attachment in writ jurisdiction. The Court observed that the assesseee's delay and inaction precluded equitable intervention.

Ratio vs. Obiter: Ratio - Attachment arising from an assessment that the assesseee allowed to become final by non-appeal cannot be effectively challenged in writ jurisdiction absent exceptional circumstances; the proper forum is the appellate mechanism. Obiter - Whether specific steps taken during recovery met statutory requirements was not decided on merits.

Conclusions: The challenge to attachment of bank accounts was not sustainable in writ jurisdiction because the underlying assessment was not timely challenged by appeal.

Overall Conclusion

The writ petition was dismissed at the threshold as not maintainable because the assesseee failed to file the statutory appeal within the prescribed or extended period, allowed the best-judgment assessment to become final, and therefore could not seek relief under Article 226 for issues that were required to be agitated through the statutory appellate remedy. Pending applications were also dismissed.

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