2025 (2) TMI 1261 - HC - GST

Petitioner firm directed to file appeal within 15 days; appellate body to decide expeditiously considering Circular No.150/06/2021-GST

Writ petitions dismissed as disposed: the HC directed the petitioner-firm to file an appeal against the final orders within 15 days. The respondents must ... Maintainability of petition - availability of remedy of appeal - verification of taxability on Toll Collection Rights - petitioner-firm is ready to file an appeal and it shall be satisfied if, upon filing of the appeal, the respondents shall consider the same keeping into consideration the Circular dated 17-6-2021 bearing No. 150/06/2021-GST and the Audit Reports - HELD THAT:- These writ petitions are disposed off with a direction to the petitioner-firm to move an appeal against the final orders passed by the authority within a period of 15 days from today. The appeal shall be decided expeditiously, preferably within a period of 3 months from the date of filing of the same strictly in accordance with law while keeping into consideration the Circular dated 17-6-2021 bearing No. 150/06/2021-GST and the Audit Reports dated 19-6-2023 bearing No. 09/DC-12/GST AUDIT/2022-23/No. 339/40 and 28-6-2024 bearing No. DCCT(Audit)-1/2024-25 passed by the State of Gujarat and the State of Karnataka respectively. Petition disposed off. ISSUES PRESENTED AND CONSIDERED 1. Whether the impugned orders-having been passed after applying provisions of the RGST/CGST/IGST Acts and Rules-are amenable to writ jurisdiction or are primarily contestable by way of statutory appeal. 2. Whether the petitioner-firm should be directed to prefer the statutory appeal and, if so, the manner and parameters in which the appellate authority is to decide the appeal (including consideration of a specified Circular and certain audit reports). 3. Whether interim relief (stay) should be continued or disposed of pending the filing and decision of the appeal. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Competency of Writ Jurisdiction vis-à-vis Availability of Statutory Appeal Legal framework: The judgment applies the principle that where a statutory appeal is available against administrative or quasi-judicial orders passed under tax statutes (here, provisions of RGST/CGST/IGST Acts and Rules), writ jurisdiction is ordinarily not to be exercised to substitute the appellate remedy; relief by writ is exceptional and requires demonstration of lack of alternative efficacious remedy or violation of fundamental rights. Precedent Treatment: No specific precedents were cited in the text of the judgment; the Court relied on well-settled jurisdictional doctrine that a statutory appeal is the appropriate remedy where available. Interpretation and reasoning: The Court observed that the impugned orders had been rendered after application of substantive provisions of the GST statutes and that a remedy in appeal exists. On the limited submission made by counsel that an appeal would be preferred, the Court found it appropriate to require the petitioner to pursue the statutory appellate remedy rather than seek writ relief. Ratio vs. Obiter: Ratio - Where statutory appeal exists against orders passed under the GST framework, writ petitions challenging such orders should be disposed of with directions to avail the appellate remedy, absent exceptional circumstances. Conclusion: The writ petitions were disposed of on the ground that an appeal is the appropriate remedy; petitioners were directed to file the appeal within a fixed period. Issue 2 - Direction to File Appeal and Mandate to Appellate Authority on Consideration of Particular Materials Legal framework: Administrative law principles requiring adjudicatory authorities to decide appeals strictly in accordance with law and consider relevant materials, including binding or persuasive circulars and audit reports, where these bear on factual and legal determinations. Precedent Treatment: The Court did not cite specific antecedent decisions but applied ordinary principles that appellate authorities must consider relevant statutory provisions, administrative instructions, and material facts placed before them. Interpretation and reasoning: On the petitioner's undertaking to file an appeal, the Court directed that the appeal be considered expeditiously and strictly in accordance with law while keeping in view (i) the Circular dated 17-6-2021 (No. 150/06/2021-GST) and (ii) the two audit reports dated 19-6-2023 (State of Gujarat) and 28-6-2024 (State of Karnataka). The Court summarized the relevant portions of those audit reports which concern taxability of toll-collection rights, the nature of SPVs under BOT/BOT-type contracts, the question of whether SPVs render construction services to the grantor, and whether input tax credit claims were reversed or ineligible. The Court required the appellate authority to give due consideration to those materials notwithstanding that they originate from other state audit processes and an administrative circular, because they are germane to the issues raised in the petitioner's prospective appeal. Ratio vs. Obiter: Ratio - When a statutory appeal is preferred, the appellate authority must consider all relevant legal instruments and audit findings that materially bear on the issues; the court may direct the appellate forum to consider specified materials and to decide expeditiously. Obiter - The Court's acceptance of the factual summaries from the audit reports as settled for purposes of directing the appeal is pragmatic and procedural rather than a final adjudication on merits. Conclusion: The petitioner was ordered to file the appeal within 15 days and the appellate authority was directed to decide it expeditiously, preferably within three months, strictly in accordance with law and while keeping in consideration the specified Circular and audit reports; both parties were permitted to advance all necessary contentions in the appeal. Issue 3 - Treatment of Interim Relief / Stay Petitions Pending Appeal Legal framework: Courts may grant or continue interim relief where necessary to protect parties' rights pending final adjudication, but may decline such relief where an adequate alternative remedy exists and the party undertakes to pursue it expeditiously. Precedent Treatment: No authorities were cited; the Court applied the ordinary exercise of discretion to dispose of stay petitions in light of directions to pursue the statutory appeal. Interpretation and reasoning: Given the petitioner's willingness to file an appeal and the assurance by the State to consider the appeal in light of specified materials, the Court found no justification to retain or extend interim relief by writ. The stay petitions were therefore disposed of. Ratio vs. Obiter: Ratio - Where an appellant undertakes to pursue an adequate statutory remedy and the respondent affords assurances to consider specified materials and decide expeditiously, interlocutory relief in original writ proceedings may be vacated and the matter directed to the appellate forum. Conclusion: Stay petitions stand disposed; no interim protection was continued by the Court. Ancillary Observations and Procedural Directions 1. The Court recorded the respondent's assurance to consider any appeal strictly in accordance with law and to have regard to the Circular and the audit reports; such assurance formed the basis for disposing the writs and the stay petitions. 2. The Court summarized relevant portions of the audit reports to indicate their materiality: the Gujarat audit's acceptance of the SPV's clarification regarding toll-collection rights assigned by NHAI and the Karnataka audit's acceptance of the SPV's explanation and dropping of proceedings where ITC reversal had been undertaken. These summaries were used for procedural direction and did not amount to final adjudication on merits. 3. It was explicitly left open for both parties to make all necessary contentions in the appeal; the directions were procedural and did not preclude full appellate consideration of facts and law.