Writ petition dismissed as adequate alternative remedy exists under Section 107 of Assam GST Act for wrongful refund claims

Gauhati HC dismissed writ petition challenging GST order dated 12.08.2024 involving wrongful refund claim and willful mis-declaration of available ITC. Court held petitioners have adequate alternative remedy under Section 107 of Assam GST Act, 2017. However, considering frozen bank accounts mentioned in show cause notice dated 09.04.2024, appellate authority directed to permit appeal filing without pre-deposit if frozen accounts contain deposits equivalent to or exceeding required amount under Section 107(6)(b). Petition disposed with liberty to file appeal under statutory provisions.

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Issues Involved:
1. Passing of a single order for two financial years under Section 74 (10) of the Assam GST Act, 2017.
2. Jurisdictional authority to pass the impugned order.
3. Initiation of proceedings under Section 74 of the Assam GST Act, 2017 after dropping proceedings under Section 61.
4. Violation of principles of natural justice.
5. Availability of alternative and efficacious remedy under Section 107 of the Assam GST Act, 2017.
6. Requirement of pre-deposit for filing an appeal.

Issue-wise Detailed Analysis:

1. Passing of a Single Order for Two Financial Years:
The Petitioners contended that under Section 74 (10) of the Assam GST Act, 2017, the Respondent No. 4 could not have passed a single order for two financial years. The Court opined that although the authority should ideally pass separate orders for each financial year, the passing of a single composite order does not render the order without jurisdiction or invalid.

2. Jurisdictional Authority to Pass the Impugned Order:
The Petitioners argued that the notice was issued by Respondent No. 3, but the order was passed by Respondent No. 4, claiming that only the authority who issued the Show Cause Notice could pass the impugned order. The Court found this submission to be misconceived, noting that the concerned authority had the jurisdiction to pass the order.

3. Initiation of Proceedings under Section 74 After Dropping Proceedings under Section 61:
The Petitioners claimed that since proceedings under Section 61 for the tax period April 2022 to March 2023 were dropped, no proceedings could be initiated under Section 74 for the same period. The Court did not find merit in this argument, indicating that the initiation of proceedings under Section 74 was within the jurisdiction of the authority.

4. Violation of Principles of Natural Justice:
The Petitioners alleged a violation of natural justice, asserting they were not afforded an additional opportunity to submit a reply to the Show Cause Notice. The Court held that the Petitioners were given an opportunity to submit their reply and failed to do so. The Court observed that the Petitioners acted casually and did not follow up after requesting additional time, thus there was no violation of natural justice.

5. Availability of Alternative and Efficacious Remedy:
The Respondents argued that the Petitioners have an alternative and efficacious remedy under Section 107 of the Assam GST Act, 2017, and thus the writ petition should not be entertained. The Court agreed, referencing the Supreme Court's judgment in PHR Invent Educational Society Vs. UCO Bank, which emphasized that High Courts should not entertain writ petitions if an effective remedy is available. The Court concluded that the Petitioners could raise all issues in the appeal under Section 107.

6. Requirement of Pre-deposit for Filing an Appeal:
The Petitioners expressed concerns about the requirement of a 10% pre-deposit for filing an appeal, given that their bank accounts were frozen. The Court directed that if the frozen accounts contain sufficient funds, the Appellate Authority should permit the appeal without requiring an additional pre-deposit. If the funds are insufficient, the Petitioners must deposit the shortfall to comply with Section 107 (6) (b) of the Act.

Conclusion:
The Court did not entertain the writ petition due to the availability of an alternative remedy under Section 107 of the Assam GST Act, 2017. The Petitioners were granted liberty to file an appeal and raise all relevant issues before the Appellate Authority. The Court provided specific directions regarding the pre-deposit requirement, balancing the equities and interests of justice. The writ petition was disposed of with these observations and directions.

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