Writ petition dismissed for tax assessment challenge after failing to file Section 107 statutory appeal within limitation period

The HC dismissed a writ petition challenging tax assessment under RGST/CGST Act, 2017. The petitioner failed to file statutory appeal under Section 107 within the prescribed limitation period or extended period for condonation of delay. The petitioner received show cause notice and proper hearing opportunity before the assessment order dated 21.12.2022. The HC held the writ petition unmaintainable, following SC precedent in Glaxo Smith Kline Consumer Health Care Limited, as the petitioner consciously chose not to pursue available statutory remedy and approached the court only after limitation period expired.

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1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered by the Court are:

(a) Whether the writ petition challenging the show cause notice dated 28.10.2022 and the order dated 21.12.2022 passed under Section 74 of the Rajasthan Goods and Services Tax Act, 2017 (RGST Act, 2017) / Central Goods and Services Tax Act, 2017 (CGST Act, 2017) is maintainable in the absence of filing a statutory appeal within the prescribed time under Section 107 of the RGST Act, 2017 / CGST Act, 2017.

(b) Whether the petitioner's failure to file an appeal within the limitation period or seek condonation of delay precludes the High Court from entertaining a writ petition under Article 226 of the Constitution of India challenging the assessment order.

(c) The applicability and effect of the Supreme Court's decision in "Assistant Commissioner (CT) LTU, Kakinada & Ors. vs. Glaxo Smith Kline Consumer Health Care Limited" on the maintainability of writ petitions in such circumstances.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (a) and (b): Maintainability of writ petition in absence of statutory appeal

Relevant legal framework and precedents: The statutory remedy against an order passed under Section 74 of the RGST Act, 2017 / CGST Act, 2017 is by way of an appeal under Section 107 of the respective Acts. The limitation period for filing such appeal is prescribed by law, and the appellate authority has limited power to condone delay. The Supreme Court's ruling in the "Glaxo Smith Kline Consumer Health Care Limited" case clarified that the High Court should not entertain writ petitions challenging assessment orders if the statutory appeal remedy is available but has not been availed within the prescribed period.

Court's interpretation and reasoning: The Court noted that the petitioner did not file any appeal against the order dated 21.12.2022 within the statutory limitation period or seek condonation of delay. The petitioner's writ petition was thus an attempt to circumvent the statutory appeal mechanism. The Court relied heavily on the Supreme Court's decision which held that the remedy of appeal is a creature of statute and failure to avail it within the prescribed period bars the High Court from entertaining a writ petition on the same grounds.

Key evidence and findings: The petitioner was issued a show cause notice and given opportunity of hearing before the impugned order was passed. There was no allegation that principles of natural justice were violated or that the petitioner was not given an opportunity to be heard. The petitioner did not explain why the statutory appeal remedy was not pursued. The Court observed that the petitioner consciously chose not to file an appeal and waited for the limitation period to expire.

Application of law to facts: Since the petitioner failed to file an appeal within the prescribed period or seek condonation, the statutory remedy was foreclosed. The Court applied the principle from the "Glaxo Smith Kline" case that the High Court should not entertain writ petitions challenging assessment orders where the statutory appeal remedy is available but not availed.

Treatment of competing arguments: The petitioner argued against the validity of the show cause notice and order, but the Court found no merit in entertaining these challenges through writ jurisdiction when a statutory appeal remedy existed and was not pursued. The Court also noted that the petitioner did not allege any violation of natural justice or procedural irregularity that would justify bypassing the appeal process.

Conclusions: The writ petition was held to be not maintainable and liable to be dismissed for non-exercise of the statutory appeal remedy within the prescribed time.

Issue (c): Applicability of the Supreme Court's decision in "Glaxo Smith Kline Consumer Health Care Limited"

Relevant legal framework and precedents: The Supreme Court in the cited case addressed whether the High Court could entertain a writ petition challenging an assessment order when the statutory appeal remedy was foreclosed by limitation. The Court held that the High Court should not entertain such writ petitions, emphasizing the primacy of statutory remedies and limitation periods.

Court's interpretation and reasoning: The Court reiterated that the remedy of appeal is a statutory right and not a fundamental or constitutional right. If the appeal is not filed within the prescribed or extended limitation period, the appellate authority cannot entertain it, and the High Court should not intervene by entertaining a writ petition. The Court highlighted that mere failure to file an appeal within time does not amount to violation of natural justice or statutory requirements.

Key evidence and findings: The Supreme Court examined the facts where the assessee was served with the order but delayed filing the appeal without sufficient cause. The Court found that the delay was not satisfactorily explained and that the High Court erred in entertaining the writ petition. The Court also noted that the assessee had deposited part of the tax amount and pursued other remedies which did not substitute the statutory appeal.

Application of law to facts: The Court applied this precedent to the present case, where the petitioner similarly failed to file an appeal within time and did not provide any plausible explanation for the delay. The petitioner's attempt to challenge the order by writ petition was therefore barred.

Treatment of competing arguments: The petitioner's argument that the writ petition was maintainable was rejected in light of the binding precedent. The Court emphasized that the petitioner's failure to avail statutory remedies cannot be remedied by invoking writ jurisdiction.

Conclusions: The precedent decisively supported dismissal of the writ petition for non-maintainability due to non-exercise of statutory appeal remedy.

3. SIGNIFICANT HOLDINGS

The Court held:

"Taking any view of the matter, therefore, the High Court ought not to have entertained the subject writ petition filed by the respondent herein. The same deserved to be rejected at the threshold."

Core principles established include:

• The statutory remedy of appeal under the RGST Act, 2017 / CGST Act, 2017 is exclusive and must be exhausted before invoking writ jurisdiction.
• The High Court, in exercise of its writ jurisdiction under Article 226, should not entertain challenges to assessment orders where the statutory appeal remedy has not been pursued within the prescribed time.
• Failure to file an appeal within the limitation period or to seek condonation of delay bars the High Court from entertaining a writ petition on the same grounds.
• The remedy of appeal is a creature of statute and does not constitute a fundamental or constitutional right; hence, limitation bars cannot be circumvented by writ petitions.
• Absence of violation of natural justice or procedural irregularity further negates maintainability of writ petitions challenging such orders.

Final determinations:

The writ petition challenging the show cause notice and order passed under Section 74 of the RGST Act, 2017 / CGST Act, 2017 was dismissed for non-maintainability as the petitioner failed to file a statutory appeal within the prescribed limitation period or seek condonation of delay.

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