Facts of the Case

The petitioner, M/s Shyam Sunder Girdhar Gopal, filed three connected writ petitions before the Rajasthan High Court challenging identical assessment orders dated 22.04.2021 passed by the Joint Commissioner, State Tax, Circle Nagaur under Section 74(1) of the Rajasthan Goods and Services Tax Act, 2017. The impugned orders imposed tax, interest, and penalty upon the petitioner. The petitioner sought quashing of these assessment orders by invoking the writ jurisdiction of the High Court.

Issues Involved

  1. Whether a writ petition challenging assessment orders under the GST law is maintainable when an effective statutory appellate remedy is available.
  2. Whether the assessment orders were liable to be set aside on the ground of violation of the principles of natural justice due to the alleged absence of personal hearing.
  3. Whether the petitioner could bypass the statutory appellate mechanism prescribed under the GST law.

Petitioner’s Arguments

  • The petitioner challenged the assessment orders passed under Section 74(1) of the RGST Act.
  • It was contended that the impugned orders deserved interference by the High Court under Article 226.
  • The petitioner sought to contend that the assessment proceedings suffered from violation of the principles of natural justice.

Respondent’s Arguments

  • The respondents raised a preliminary objection regarding the maintainability of the writ petitions.
  • It was argued that an effective statutory remedy of appeal under Section 107 of the CGST Act was available, making the writ petitions not maintainable.
  • Reliance was placed on the Supreme Court judgment in Assistant Commissioner of State Tax & Ors. vs M/s Commercial Steel Ltd.
  • The respondents further submitted that the petitioner had filed Form GST DRC-06 and had consciously selected "No" against the option for personal hearing.
  • Since detailed replies were submitted and considered before passing well-reasoned assessment orders, there was no violation of the principles of natural justice.
  • The respondents also alleged suppression of material facts by the petitioner.

Court Order / Findings

The Rajasthan High Court dismissed all three writ petitions and held that:

  • The petitioner had consciously declined the opportunity of personal hearing by selecting "No" in Form GST DRC-06.
  • Since the petitioner voluntarily waived the opportunity of personal hearing, the assessment orders could not be treated as having been passed in violation of the principles of natural justice.
  • An effective statutory remedy of appeal under Section 107 of the CGST Act was available.
  • Following the law laid down by the Supreme Court in Assistant Commissioner of State Tax vs Commercial Steel Ltd., the High Court declined to entertain the writ petitions.
  • The Court refrained from examining the allegation regarding suppression of material facts and instead relegated the petitioner to avail the statutory appellate remedy.
  • The writ petitions were dismissed; however, liberty was granted to the petitioner to file appeals before the competent appellate authority under Section 107 of the CGST Act.

Important Clarification

  • Mere allegation of denial of personal hearing is insufficient where the taxpayer has expressly declined such hearing in Form GST DRC-06.
  • High Courts ordinarily will not entertain writ petitions against GST assessment orders when an effective statutory appellate remedy exists.
  • The existence of an appeal under Section 107 of the CGST Act is a significant ground for refusing interference under Article 226, except in exceptional circumstances.
  • Taxpayers should carefully exercise procedural options during GST proceedings, as waiver of personal hearing may later weaken allegations of breach of natural justice.

Sections Involved

  • Section 74(1) of the Rajasthan Goods and Services Tax Act, 2017
  • Section 107 of the Central Goods and Services Tax Act, 2017
  • Article 226 of the Constitution of India

Link to Download the Order

https://www.mytaxexpert.co.in/uploads/1785391036_2289compressed.pdf

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