Facts of the Case

The petitioner, Shamnad Abdul Kabeer, aged 49, resident of Pothencode, Thiruvananthapuram, filed WP(C) No.42832 of 2023 before the High Court of Kerala at Ernakulam impugning an assessment order (Ext.P1) passed by the Assistant Commissioner (Taxpayer Service Circle, Kazhakoottam) under Section 73 of the CGST/SGST Act, 2017 read with Rule 142(5) of the GST Rules. The Assessing Authority had determined the petitioner's tax liability along with interest and penalty at ₹12,16,462, and a notice in Form GST DRC-07 was issued directing the petitioner to remit the amount within three months, failing which recovery proceedings would follow under the Act and Rules. The DRC-07 notice also informed the petitioner of the option to file a statutory appeal under Section 107 of the CGST Act if aggrieved by the order. Instead of pursuing that appellate remedy, the petitioner directly approached the High Court by way of writ petition, relying on the assessment order, a statement of input tax credit reflected in Form GSTR-2A, a rectification petition dated 17 December 2023 filed before the Assessing Authority, and a judgment of the same Court in WP(C) No.41219 of 2023 dated 8 December 2023.

The petitioner also placed reliance on a co-ordinate bench decision of the same High Court in a separate matter to argue that the writ petition ought to be entertained notwithstanding the pendency of the rectification petition, but the Court did not find this sufficient to depart from the ordinary rule of exhausting the statutory appellate remedy in a case involving disputed facts regarding input tax credit.

Issues Involved

  1. Whether the writ petition challenging the Section 73 assessment order and DRC-07 demand could be entertained directly, bypassing the statutory appellate remedy under Section 107 of the CGST Act.
  2. Whether the petitioner had made out any exceptional ground warranting the Court's intervention under Article 226 despite the existence of an alternative remedy.

Petitioner's Arguments

  • Challenged the assessment order (Ext.P1) determining tax, interest and penalty liability of ₹12,16,462/-, relying on the input tax credit statement in Form GSTR-2A (Ext.P2).
  • Placed on record a rectification petition (Ext.P3) filed before the very same Assessing Authority seeking correction of the order.
  • Relied on a co-ordinate bench judgment of the same Court in WP(C) No.41219 of 2023 dated 8 December 2023 (Ext.P4) in support of maintainability of the writ petition.

Respondent's Arguments

  • The respondent authorities, represented by the Government Pleader, relied on the fact that the DRC-07 notice itself had informed the petitioner of the statutory appellate remedy under Section 107 of the CGST Act.
  • Contended that the availability of an equally efficacious alternative remedy was sufficient ground for the Court to decline to entertain the writ petition.

Court Order/Findings

  • The Court found that the assessment order had been passed under Section 73 read with Rule 142(5), and that the petitioner had been expressly directed and suggested to file an appeal under Section 107 if aggrieved.
  • Held that there was no ground to entertain the writ petition, as the petitioner had an equally efficacious alternative remedy of an appeal under Section 107 of the CGST/SGST Act.
  • Operative direction: the writ petition was dismissed, leaving it open to the petitioner to pursue any other remedy as may be applicable to him in accordance with law.

Important Clarification

Where a GST assessment order under Section 73 is accompanied by a Form GST DRC-07 demand notice that expressly informs the assessee of the statutory right of appeal under Section 107, a High Court will ordinarily decline to entertain a writ petition against the assessment order on the ground of availability of an equally efficacious alternative remedy, unless the assessee demonstrates a jurisdictional defect, breach of natural justice, or other exceptional circumstance.

This is consistent with the settled position that writ courts exercise self-imposed restraint in tax matters where a complete statutory appellate mechanism, capable of examining both factual and legal grounds, is already available to the aggrieved assessee.

Sections Involved

  • Section 73 of the CGST/SGST Act, 2017 – determination of tax not paid or short paid.
  • Section 107 of the CGST Act, 2017 – statutory appeal to the Appellate Authority.
  • Rule 142(5) of the CGST Rules, 2017 – summary of the order in Form GST DRC-07.

Decision – In Favour of

The decision is in favour of the Department insofar as the writ petition was dismissed and the assessment order was left undisturbed. However, the dismissal is purely on the ground of alternative remedy, and the petitioner remains free to challenge the tax, interest and penalty demand of ₹12,16,462/- on merits before the Appellate Authority under Section 107.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court of Kerala at Ernakulam
  • Case No.: WP(C) No.42832 of 2023
  • CNR: Not available
  • Coram: Justice Dinesh Kumar Singh
  • Decision Date: 19 December 2023
  • Disposal Nature: Writ petition dismissed, alternative remedy of appeal available

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