Tax Demand Order Dismissed: Petitioner Directed to Pursue Appellate Remedy Under Section 107 of Chhattisgarh GST Act

The HC dismissed the writ petition challenging a tax demand order, finding the petition non-maintainable due to an available alternative remedy under section 107 of the Chhattisgarh GST Act. While acknowledging potential procedural irregularities in denying a personal hearing, the Court directed the petitioner to pursue appellate remedies, preserving liberty to raise grievances before the Appellate Authority.

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1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered by the Court are:

a) Whether the impugned order dated 29/01/2025 passed by the Assistant Commissioner under section 74(9) of the Chhattisgarh Goods and Service Tax Act, 2017, demanding payment of Rs. 2,48,454/-, is without authority of law, bad in law, or violative of fundamental rights and principles of natural justice, particularly for being passed without granting an opportunity of personal hearing.

b) Whether the petitioner was entitled to a personal hearing under section 75(4) of the Act of 2017, given that the petitioner had opted for personal hearing in response to the summary show cause notice.

c) Whether the writ petition is maintainable in view of the availability of an alternative remedy of appeal under section 107 of the Act of 2017, which requires pre-deposit of 10% of the tax demanded.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Validity of the impugned order and violation of principles of natural justice

Relevant legal framework and precedents: The impugned order was passed under section 74(9) of the Chhattisgarh Goods and Service Tax Act, 2017, which empowers the Assistant Commissioner to demand tax dues after adjudication. Section 75(4) of the Act mandates that if the assessee opts for personal hearing while replying to a summary show cause notice, the authorities are obliged to provide such hearing before passing any order.

Court's interpretation and reasoning: The petitioner contended that despite selecting the option for personal hearing in the reply to the show cause notice dated 05/08/2024, the order was passed ex-parte without granting the hearing, thereby violating section 75(4) and principles of natural justice. The petitioner argued that the order was passed without considering the reply in its proper perspective.

Key evidence and findings: The petitioner's reply dated 09/10/2024, uploaded on the official website, indicated a request for personal hearing. However, the impugned order dated 29/01/2025 was passed without any recorded personal hearing or consideration of the petitioner's submissions.

Application of law to facts: The petitioner's legal position was that non-grant of personal hearing despite an explicit request amounted to violation of statutory mandate and natural justice. The Court acknowledged the statutory requirement under section 75(4) but did not delve into the merits of whether the personal hearing was indeed denied or whether the order was justified on merits.

Treatment of competing arguments: The respondent did not dispute the petitioner's entitlement to personal hearing but emphasized the availability of an alternative remedy in the form of appeal under section 107. The Court balanced the petitioner's grievance against procedural safeguards and alternative remedies.

Conclusions: While the petitioner raised a valid procedural grievance, the Court did not find it sufficient to entertain the writ petition at this stage, as the issue could be agitated before the Appellate Authority.

Issue 2: Maintainability of the writ petition in view of alternative remedy under section 107

Relevant legal framework and precedents: Section 107 of the Chhattisgarh Goods and Service Tax Act, 2017 provides for appeal against orders passed under the Act. Such appeals require a pre-deposit of 10% of the tax demanded. The limitation period for filing appeal is 3 or 6 months, extendable by one month.

Court's interpretation and reasoning: The respondent argued that the writ petition was not maintainable because the petitioner had an efficacious alternative remedy by way of appeal. The Court recognized that the availability of alternative statutory remedies generally bars writ jurisdiction unless exceptional circumstances exist.

Key evidence and findings: The petitioner had not filed an appeal but directly approached the High Court by way of writ petition, arguably to avoid the pre-deposit requirement. The Court noted the statutory scheme envisages adjudication of such disputes through the appellate mechanism.

Application of law to facts: The Court held that the petitioner's grievance regarding denial of personal hearing and other procedural lapses could be agitated before the Appellate Authority, which is empowered to decide the matter in accordance with law. The Court emphasized that the writ jurisdiction is discretionary and should not be exercised to circumvent statutory remedies.

Treatment of competing arguments: The petitioner contended that violation of section 75(4) and principles of natural justice warranted direct writ intervention. The Court acknowledged this but held that such procedural issues can also be raised in the appeal, and therefore, do not justify bypassing the appellate forum.

Conclusions: The Court declined to entertain the writ petition on maintainability grounds and directed the petitioner to avail the alternative remedy of appeal with liberty preserved.

3. SIGNIFICANT HOLDINGS

"Of Course, there is no bar for entertaining the writ petition despite availability of the alternative remedy. However, it is for this Court to entertain or not to entertain the same looking to the facts and circumstances of the case."

"Admittedly, in the case in hand, the impugned order is appealable under section 107 of the Chhattisgarh Goods and Service Tax, Act, 2017 which requires pre-deposit of 10%. The ground which has been agitated before this Court can very well be agitated by the petitioner before the Appellate Authority which may decide the same in accordance with law."

"Therefore, at this stage this Court is not inclined to entertain this writ petition and the writ petition is dismissed. However liberty is reserved in favour of the petitioner to avail the alternative remedy as per law."

The Court established the core principle that the existence of an efficacious alternative remedy, particularly statutory appeal provisions, ordinarily bars the exercise of writ jurisdiction unless exceptional circumstances warrant otherwise.

The Court also underscored the procedural entitlement under section 75(4) for personal hearing but clarified that procedural grievances do not automatically justify bypassing the appellate process.

Final determination on issues:

- The impugned order's validity and alleged violation of natural justice were not adjudicated on merits but were held to be matters for the Appellate Authority.

- The writ petition was dismissed on maintainability grounds due to the availability of an alternative remedy under section 107.

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