2024 (6) TMI 111 - HC - GST

Writ petition maintainable for pure legal questions despite alternative remedy; transitional input tax credit deadline calculated excluding starting date under Section 9 General Clauses Act

Gauhati HC held that writ petition under Article 226 is maintainable despite alternative remedy when raising pure questions of law without disputed facts. ... Transitional Input Tax Credit - time limitation - Inadmissibility of availing credit beyond thirty days - recovery of tax with interest and penalty - maintainability and entertainability of a writ petition under Article 226 of the Constitution of India, despite alternative remedy provided by the relevant statutes. Maintainability and entertainability of a writ petition under Article 226 of the Constitution of India - HELD THAT:- After making a survey of a number of decisions, it has been observed that when the writ petition raises a pure question of law and if investigation into facts is unnecessary, the High Court can entertain a writ petition in its discretion even though the alternative remedy is not availed of. It has been observed that where the controversy is a purely legal one and it does not involve disputed questions of fact, but only questions of law, then it should be decided by the High Court instead of dismissing the writ petition on the ground of an alternative remedy being available - It is also settled proposition of law that the High Court in its extra-ordinary and discretionary writ jurisdiction under Article 226 can examine the decision of a subordinate tribunals, bodies or officers to see whether it has acted wholly without jurisdiction, or in excess of it, or in violation of the principles of natural justice, or refuses to exercise a jurisdiction vested in them, or there is a manifest error in the face of the record. Time Limitation - HELD THAT:- It is within a period of thirty days from the appointed day, that is, 01.07.2017, an assessee like the petitioner has to comply with the provisions contained in sub-section [5] of Section 140 of the CGST Act, 2017. No provision in the CGST Act, 2017 regarding calculation of period of time has been brought to the notice of the Court by the learned counsel for the parties. The Constitution Bench, in Dilip Kumar and Company [2018 (7) TMI 1826 - SUPREME COURT], has observed that an Act of Parliament/Legislature cannot foresee all types of situations and all types of consequences. It is for the Court to see whether a particular case falls within the broad principles of law enacted by the Legislature. It has been observed that there are many occasions where the language used and the phrases employed in the statute are not perfect. In all the Acts and Regulations, made either by the Parliament or the Legislature, the words and phrases as defined in the General Clauses Act and the principles of interpretation laid down in the General Clauses Act are to be necessarily kept in view. From plain and simple language of Section 9 of the General Clauses Act, it is discernible that if particular time-period is given from a certain date within which an act is to be done, the day on that date is to be excluded and meaning thereby, the period is to be calculated by excluding the day from which the period is to be reckoned. The provisions of sub-section [2] of Section 9 of the General Clauses Act has made it evidently clear that Section 9 applies to all Central Acts made after the third day of January, 1868, meaning thereby, Section 9 is applicable to the CGST Act, 2017. For the expression, ‘within a period of thirty days from the appointed day’, occurring in sub-section [5] of Section 140 of the CGST Act, 2017, the period has to be reckoned by excluding the appointed day, which is 01.07.2017. If after exclusion of the appointed day [01.07.2017], the period of thirty days is counted then the thirtieth day falls on 31.07.2017. Thus, this Court is of the unhesitant view that the impugned TRAN Invoices, which were entered in the recipients’ Books of Accounts on 31.07.2017 were within the period of thirty days from the appointed day [01.07.2017], as required in sub-section [5] of Section 140 of the CGST Act. Consequently, the findings recorded in Paragraph 7.0 of the Order-in-Original dated 23.11.2023 by the Adjudicating Authority is not sustainable in law. Petition allowed. Issues Involved:1. Legality of the Order-in-Original under Section 140(5) of the CGST Act, 2017.2. Maintainability of the writ petition under Article 226 of the Constitution of India despite the availability of an alternative statutory remedy.Summary:1. Legality of the Order-in-Original under Section 140(5) of the CGST Act, 2017:The petitioner, a private limited company, challenged the Order-in-Original dated 23.11.2023 passed by the Superintendent, GST & Central Excise, Guwahati, which disallowed transitional credit of Rs. 2,11,508/- claimed under Table 7[b] of TRAN-1 on the basis of two invoices dated 28.06.2017. The respondent authorities objected to the credit claiming it was in contravention of Section 140(5) of the CGST Act, 2017, which mandates recording invoices in the Books of Accounts within thirty days from the appointed day (01.07.2017). The petitioner argued that the delay was due to a vehicle breakdown during transit and that the entries were made on 31.07.2017, within the prescribed period if the appointed day is excluded as per Section 9 of the General Clauses Act, 1897. The Court held that the period of thirty days should be calculated by excluding the appointed day, thus making the entries on 31.07.2017 valid. Consequently, the Order-in-Original was quashed.2. Maintainability of the writ petition under Article 226 of the Constitution of India despite the availability of an alternative statutory remedy:The respondent argued that the petitioner should have pursued the statutory remedy of appeal under Section 107 of the CGST Act, 2017, instead of filing a writ petition. However, the Court noted that the writ petition raised a pure question of law regarding the interpretation of time calculation under Section 140(5) of the CGST Act, 2017, and Section 9 of the General Clauses Act, 1897. Citing precedents, the Court held that the availability of an alternative remedy does not bar the maintainability of a writ petition, especially when it involves a pure question of law. Therefore, the writ petition was deemed maintainable and was allowed.Conclusion:The Court quashed the Order-in-Original dated 23.11.2023, holding that the petitioner had complied with the provisions of Section 140(5) of the CGST Act, 2017, by making the entries within the prescribed period, calculated by excluding the appointed day as per Section 9 of the General Clauses Act, 1897. The writ petition was allowed, and no costs were imposed.