2024 (7) TMI 1240 - HC - GST

Assessment orders and Circular No.9 upheld as authorization of adjudication powers valid under Section 2(91) CGST Act 2017

M/s. A.J. Steels Represented by its Propreitor, Mr. M. Mohamed Abdul Cader Versus The State Tax Officer, The Joint Commissioner (ST), Chennai

The HC rejected a challenge to assessment orders and Circular No.9 dated 24.05.2019. The court held that authorization of adjudication powers through ... Challenge to assessment order - challenge to Circular No.9 dated 24.05.2019 - authority to delegate the power of adjudication by way of a circular contrary to Section 167 of the Act which contemplates a notification being issued - assessing authority was the inspecting authority and permitting the very same authority to adjudicate would fall foul of the maxim ''No man can be a judge of his own cause'' or not. Whether the 4th respondent has no authority to delegate the power of adjudication by way of a circular contrary to Section 167 of the Act which contemplates a notification being issued? - HELD THAT:- With regard to the 1st ground that the authorisation ought to have been made only by way of a Notification as contemplated under Section 167 of the CGST Act, 2017, the same is misplaced inasmuch as the Circular is apparently traceable to Section 2(91) of the Act and not Section 167 of the Act, thus, issuance of a notification may not be necessary for authorising/ assigning proper officers with power of adjudication. In this regard, it may be relevant to refer to the judgment of the Gujarat High Court in the case of Yasho Industries Ltd. vs. Union of India [2021 (6) TMI 918 - GUJARAT HIGH COURT] wherein identical contention stood rejected - the challenge to Circular No.9 of 2019 on the ground that the authorisation of power of adjudication by way of Circular is impermissible is liable to be rejected. Whether the assessing authority was the inspecting authority and permitting the very same authority to adjudicate would fall foul of the maxim “No man can be a judge of his own cause.”? - HELD THAT:- It is trite law that adjudication of disputed questions of fact falls outside the purview of Article 226 of the Constitution of India - There can be no doubt that even though the High Court can entertain a Writ Petition against any order or direction passed / action taken by the State and / or its authorities under Article 226 of the Constitution of India, 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. The writ petition challenging Circular No.9 of 2019 and the assessment orders for the period 2017-18 to 2020-21 are liable to be rejected - Petition disposed off. Issues Involved:1. Challenge to assessment orders for the period 2017-18 to 2020-21.2. Challenge to Circular No.9 of 2019 dated 24.05.2019.Issue-wise Detailed Analysis:1. Challenge to Assessment Orders for 2017-18 to 2020-21:The petitioner, engaged in the wholesale and retail trade of M.S. Scraps, challenged the assessment orders for the period 2017-18 to 2020-21. The defects identified during the inspection included ineligible claims of Input Tax Credit (ITC) on inward supplies and vehicles, interest under Section 50 of the Act, and penalties under Section 73(9) of the Act. The petitioner provided various documents to substantiate the genuineness of transactions, but the assessing authority rejected the claims, confirming the proposals to deny ITC and impose penalties.The court noted that the challenge to the assessment orders involves disputed questions of fact, particularly regarding the genuineness of transactions and the adequacy of documents furnished by the petitioner. The court emphasized that adjudication of disputed facts falls outside the purview of Article 226 of the Constitution of India, citing the Supreme Court's judgment in Thansingh Nathmal v. Supt. of Taxes.The court concluded that the writ petition challenging the assessment orders is not maintainable and advised the petitioner to pursue the statutory appeal process.2. Challenge to Circular No.9 of 2019 dated 24.05.2019:The petitioner challenged Circular No.9 of 2019 on two grounds:i) The 4th respondent lacked authority to delegate the power of adjudication by way of a circular contrary to Section 167 of the Act.ii) The assessing authority being the inspecting authority violates the maxim 'No man can be a judge of his own cause.'The court rejected the first ground, stating that the circular is traceable to Section 2(91) of the Act, not Section 167. It cited the Gujarat High Court's judgment in Yasho Industries Ltd. vs. Union of India, which clarified that the assignment of functions under Section 2(91) does not require a notification.Regarding the second ground, the court referred to earlier judgments under the erstwhile TNGST Act, 1959, which rejected similar challenges based on alleged bias of Enforcement Wing officers. The court found that the challenge to Circular No.9 of 2019 on the ground of bias is without merit. The court also noted subsequent circulars (Circular No.10 of 2019, 72 of 2019, 23 of 2021, and 13 of 2022) that provided guidelines for the adjudication process, further undermining the petitioner's challenge.Conclusion:The court dismissed the writ petitions challenging Circular No.9 of 2019 and the assessment orders for the period 2017-18 to 2020-21. The petitioner was granted liberty to file appeals within four weeks, subject to statutory conditions. The writ petitions were disposed of without costs, and connected miscellaneous petitions were closed.