Facts of the Case

The petitioner, M/s Shyam Sunder Girdhar Gopal, challenged three 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 (RGST Act). The assessment orders imposed tax, interest, and penalty upon the petitioner. The petitioner approached the Rajasthan High Court by filing writ petitions seeking quashing of the assessment orders.

Issues Involved

  1. Whether a writ petition under Article 226 is maintainable against assessment orders passed under Section 74(1) of the RGST Act when an effective statutory appellate remedy under Section 107 of the CGST Act 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 denial of personal hearing.
  3. Whether the petitioner could invoke the writ jurisdiction despite having voluntarily declined the option of personal hearing in Form GST DRC-06.

Petitioner's Arguments

  • The petitioner challenged the assessment orders passed under Section 74(1) of the RGST Act.
  • It was contended that the assessment proceedings suffered from violation of the principles of natural justice.
  • The petitioner sought intervention of the High Court under Article 226 for setting aside the impugned orders.

Respondent's Arguments

The State raised preliminary objections regarding the maintainability of the writ petitions and submitted that:

  • The petitioner had an effective statutory remedy of appeal under Section 107 of the CGST Act, and therefore the writ petitions were not maintainable.
  • Reliance was placed upon the Supreme Court judgment in Assistant Commissioner of State Tax & Ors. vs M/s Commercial Steel Ltd. (Civil Appeal No. 5121 of 2021).
  • Reliance was also placed on Bhaskar Laxman Jadhav & Ors. vs Karamveer Kakasaheb Wagh Education Society & Ors. (2013) 11 SCC 531.
  • The petitioner had submitted replies to the notices and had consciously selected "No" for personal hearing in Form GST DRC-06 dated 15.04.2021.
  • Since the petitioner voluntarily declined personal hearing, there was no violation of the principles of natural justice.
  • The assessment orders were reasoned orders passed after considering the petitioner's replies and could appropriately be challenged before the appellate authority.

Court Order / Findings

The Rajasthan High Court held that:

  • The petitioner had consciously opted not to avail personal hearing while filing Form GST DRC-06.
  • Consequently, the assessment orders could not be said to have been passed in violation of the principles of natural justice.
  • Since a statutory remedy of appeal under Section 107 of the CGST Act was available, the writ petitions were not maintainable.
  • Following the ratio laid down by the Supreme Court in Assistant Commissioner of State Tax vs M/s Commercial Steel Ltd., the Court declined to exercise writ jurisdiction.
  • The Court relegated the petitioner to avail the statutory appellate remedy.
  • Accordingly, all the writ petitions were dismissed, while granting liberty to the petitioner to file appeals under Section 107 of the CGST Act.
  • No order as to costs was passed.

Important Clarification

  • Mere allegation of violation of natural justice will not make a writ petition maintainable where the taxpayer has voluntarily declined the opportunity of personal hearing.
  • When an effective appellate remedy exists under Section 107 of the CGST Act, High Courts ordinarily refrain from entertaining writ petitions against GST assessment orders.
  • Selection of "No" for personal hearing in Form GST DRC-06 amounts to conscious waiver of such opportunity.
  • Assessment orders passed under Section 74(1) of the RGST Act should ordinarily be challenged before the appellate authority instead of invoking writ jurisdiction.

Sections Involved

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

Related Case Laws

  • Assistant Commissioner of State Tax & Ors. vs M/s Commercial Steel Ltd. (Civil Appeal No. 5121 of 2021)
  • Bhaskar Laxman Jadhav & Ors. vs Karamveer Kakasaheb Wagh Education Society & Ors. (2013) 11 SCC 531

Link to Download the Order

https://www.mytaxexpert.co.in/uploads/1785391174_2295compressed.pdf

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