2025 (11) TMI 1782 - HC - GST

Articles 226/227 writ against Section 73 GST ITC demand rejected for bypassing Section 107 appeal timeline

HC dismissed the writ petition under Arts. 226/227 challenging an order passed under S.73 GST Act concerning ITC discrepancies between GSTR-2A and ... Maintainability of writ petition under Articles 226/227 challenging an order passed under Section 73 of the GST Act - availability of statutory appellate remedy under Section 107 of the GST Act - discrepancies in the figures reflected in the returns in Form GSTR-2A vis-à-vis GSTR-3B relating to claim of Input Tax Credit (ITC) issued notice in Form GST ASMT-10 on 26th April, 2024 - HELD THAT:- The appellate authority is not empowered to exercise his discretion to condone the delay beyond the period specified under sub-section (4) ibid. The appellate authority is vested with discretion to condone the delay in filing the appeal within a further period of thirty days in the event the appeal is not filed within a period of three months as contemplated under sub-section (1) thereof. There is no pleading available on record to demonstrate that there was sufficient reason which prevented the petitioner from approaching this Court within the statutory period. Mere making statement that the petitioner has no other speedy, efficacious and alternative remedy would not constitute sufficient cause. This Court cannot be oblivious of the position as spelt out in the case of Orissa Mineral Development Company Ltd. [1959 (9) TMI 36 - ORISSA HIGH COURT], wherein it was held that 'The questions involved in this petition are mixed questions of law and fact. The petitioner has been contending that the sales in question were inter-State sales and also that they were sales in the course of export and as such outside the purview of the Orissa Sales Tax Act. On the other hand, the department has been contending that the sales were completed in Orissa and were consequently purely internal sales.' In the present case, the order impugned is passed on 22nd October, 2024, whereas the writ petition is filed on 23rd October, 2025. The petitioner attempted to circumvent the process of alternative remedy only to by-pass the rigours of conditions hedged for filing appeal and absence of sufficient reason demonstrating delay in approaching this Court. It is manifest on perusal of record that only to circumvent the alternative remedy available under the statute and thwarting conditions hedged for filing an appeal, the petitioner has approached this Court by way of filing the present writ petition challenging the adjudication order. Petition dismissed. 1. ISSUES PRESENTED AND CONSIDERED 1.1 Whether a writ petition under Articles 226/227 challenging an order passed under Section 73 of the GST Act is maintainable when a statutory appellate remedy under Section 107 of the GST Act was available but not availed within the prescribed limitation period. 1.2 Whether delay of about one year in approaching the Court against the adjudication order, without any pleaded or proved sufficient cause, disentitles the petitioner to discretionary relief under Articles 226/227 on the ground of delay and laches. 1.3 Whether the Court should exercise writ jurisdiction to examine disallowance of input tax credit under Section 16 of the GST Act when it involves disputed questions of fact arising from discrepancies between GSTR-2A and GSTR-3B and the assessee's non-response to statutory notices. 2. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Maintainability of writ petition in presence of statutory appellate remedy and expiry of limitation under Section 107 GST Act Legal framework 2.1 The judgment notes that Section 107 of the GST Act provides an appeal against any decision or order of the adjudicating authority. Sub-section (1) prescribes the basic limitation period, and sub-section (4) permits condonation of delay only up to a further period of one month beyond the initial prescribed period. 2.2 The Court refers to precedent emphasizing that where a statute prescribes a maximum condonable period, the appellate authority (and, by analogy, other statutory forums) has no jurisdiction to condone delay beyond such maximum period, and courts exercising writ jurisdiction should not ignore this legislative scheme. Interpretation and reasoning 2.3 The Court observes that the petitioner's contention that there was 'no other speedy, efficacious and alternative remedy' is contrary to the statutory scheme; the writ petition itself acknowledges availability of appeal under Section 107, but no appeal was filed within the statutory period. 2.4 The Court reads Section 107(4) to hold that the appellate authority's power to condone delay is strictly confined to the additional 30 days beyond the initial three-month period; delay beyond that period is not condonable, and the authority cannot assume any equitable or inherent power to extend time. 2.5 Relying on decisions including those dealing with similar limitation structures in other statutes, the Court reiterates that what even the Supreme Court cannot do under Article 142 (in extending limitation beyond a statutory maximum) cannot be done by a High Court under Article 226; entertaining a writ petition after expiry of the maximum statutory period for appeal would be in the teeth of the legislative intent. 2.6 The Court applies the principle that while existence of an alternative remedy does not absolutely bar writ jurisdiction, an assessee cannot bypass the law of limitation and the appellate process by straightaway filing a writ petition after the appeal period, including condonable extension, has lapsed. 2.7 The Court draws support from earlier authority holding that a party should not be permitted to 'escape the rigorous effects of the law of limitation' by resorting to Article 226 after failing to pursue the statutory appeal in time, particularly where the statutory appellate forum has co-extensive powers of fact-finding. 2.8 On facts, the order under Section 73 was passed on 22.10.2024, but the writ petition was filed only on 23.10.2025. No explanation is offered in the pleadings for not availing the appeal within the period permitted by Section 107, nor for the long inaction before invoking writ jurisdiction. 2.9 The Court holds that the petitioner's approach was only 'to circumvent the alternative remedy available under the statute and thwart conditions hedged for filing an appeal,' which is impermissible. Conclusions 2.10 The writ petition is held not maintainable in view of the efficacious alternative remedy under Section 107, which was not pursued within the statutory (including condonable) period. 2.11 The Court declines to exercise its writ jurisdiction to substitute for an appeal that has become time-barred under the GST Act. Issue 2 - Effect of delay and laches in approaching the Court under Articles 226/227 Legal framework 2.12 The Court notes that although no specific limitation period is prescribed for writ petitions under the Limitation Act, constitutional courts have imposed self-restraint and may refuse relief where there is unexplained delay and laches. 2.13 Reference is made to prior decisions holding that (i) once an order is uploaded on the GST common portal, it is deemed to have been served under Section 169(1)(d) of the GST Act; and (ii) belated writ petitions challenging such orders, without cogent explanation, can be rejected on the ground of delay and laches. Interpretation and reasoning 2.14 The Court notes that the adjudicating authority had intimated discrepancies to the petitioner via Form ASMT-10, but the petitioner neither responded within the stipulated time nor complied in any manner. The Section 73 order was then passed on the basis of available records and returns. 2.15 The Court emphasizes that the writ petition is completely silent about non-response to the notices during the Section 73 proceedings and does not contain any pleading showing 'sufficient reason' preventing timely recourse either to the appellate authority or to the High Court. 2.16 Citing earlier Division Bench and Supreme Court decisions, the Court underscores that once an order is made available on the common portal, plea of ignorance of the order is not acceptable, and the principle of deemed service under Section 169(1)(d) applies. 2.17 The Court treats the nearly one-year delay, from 22.10.2024 to 23.10.2025, as 'inordinate,' and notes that there is 'no scintilla of scope' to justify such delay in the absence of any cause pleaded in the writ petition. Mere assertion of lack of alternative remedy does not amount to sufficient cause. 2.18 Following precedents, the Court reiterates that even though writ jurisdiction is discretionary, unexplained delay may disentitle the petitioner to relief, especially where allowing such writs would undermine the finality intended by statutory limitation schemes. Conclusions 2.19 The Court holds that the writ petition suffers from gross delay and laches, with no explanation on record, and therefore refuses to exercise discretionary jurisdiction under Articles 226/227. 2.20 The challenge to the adjudication order is rejected on the independent ground of inordinate and unexplained delay in approaching the Court. Issue 3 - Appropriateness of deciding ITC disallowance and Section 16 GST Act issues in writ proceedings Legal framework 2.21 The petitioner relied on Section 16 of the GST Act to assert a substantive right to input tax credit on purchases from registered suppliers, contending that disallowance of ITC under Section 16(2)(c) for supplier's non-compliance is arbitrary where genuineness of purchases is not disputed. Interpretation and reasoning 2.22 The Court notes that the adjudicating authority conducted scrutiny under Section 61 read with Rule 99, comparing GSTR-2A with GSTR-3B for the relevant periods, identified discrepancies indicating excess ITC, issued ASMT-10, and proceeded ex parte when the petitioner failed to reply. 2.23 The Court observes that the petitioner's contentions regarding ITC entitlement, genuineness of purchases, and alleged fault of the supplier raise 'serious disputed fact' questions, which are essentially matters for the statutory authority and appellate forum to investigate and adjudicate, not for determination in writ jurisdiction. 2.24 The Court, while summarizing the petitioner's arguments on Section 16(2)(c), does not engage in any detailed interpretation of the said provision, and instead focuses on the threshold bar of maintainability and the unsuitability of writ jurisdiction for fact-intensive tax disputes. 2.25 The Court emphasizes, with reference to Supreme Court authority (including CIT v. Chhabil Dass Agarwal and other cited decisions), that where the statute provides a complete mechanism including appeal for examination of factual and legal issues, ordinarily writ jurisdiction should not be invoked to bypass such mechanism. Conclusions 2.26 The Court declines to adjudicate on the merits of ITC disallowance or the scope of Section 16(2)(c) within this writ petition, holding that such issues involve disputed questions of fact that fall within the domain of the statutory authorities and appellate forums. 2.27 The writ petition is dismissed without entering into the substantive validity of the ITC disallowance, solely on grounds of non-maintainability, alternative remedy, delay and laches, and the presence of serious disputed factual issues.