Facts of the Case

Tvl.Ashok Trading Company, represented by its partner Mahendra N Patel, filed two writ petitions before the Madurai Bench of the Madras High Court under Article 226 of the Constitution of India, seeking a Writ of Certiorarified Mandamus to call for the records of the State Tax Officer, Inspection Cell-III, Trichy, and quash the assessment proceedings concerning GSTIN 33AAIFA8191N1ZO for the assessment years 2018-2019 and 2019-2020. The petitioner contended that the proceedings were invalid and not in accordance with the provisions of the Goods and Services Tax Act, and sought a direction to the respondent to pass a fresh order only after issuing a proper show cause notice in Form GST DRC-01. The impugned assessment orders had been passed for both assessment years, and the petitioner approached the High Court instead of the appellate forum.

Issues Involved

  1. Whether a writ petition under Article 226 is maintainable to challenge GST assessment orders on merits when an efficacious statutory appellate remedy is available.
  2. Whether the assessment orders were vitiated for want of a proper show cause notice in Form GST DRC-01.

Petitioner's Arguments

  • The impugned assessment orders for both assessment years were invalid and contrary to the provisions of the GST Act.
  • No proper show cause notice in Form GST DRC-01 had been issued before the orders were passed, in breach of the prescribed procedure.
  • The respondent ought to be directed to pass a fresh, appropriate order only after issuing a valid show cause notice.

Respondent's Arguments

  • The Additional Government Pleader appeared for the State Tax Officer and defended the assessment proceedings.
  • The petitioner had an efficacious alternate remedy of appeal before the Appellate Commissioner and ought to pursue that forum rather than invoke writ jurisdiction.

Court Order / Findings

  • The Court noted that the petitioner had challenged the assessment orders passed for assessment years 2018-2019 and 2019-2020 under the GST Act.
  • The Court held that the petitioner had an alternate remedy by way of appeal before the Appellate Commissioner under Section 107 of the GST Act, and declined to examine the correctness of the assessment orders on merits in writ jurisdiction.
  • Both writ petitions were dismissed, with liberty granted to the petitioner to pursue the appellate remedy.
  • The Court directed that if an appeal is filed before the Appellate Authority within thirty (30) days from receipt of a copy of the order, the appeal shall be considered and disposed of in accordance with law, notwithstanding any limitation that may otherwise have expired.
  • No costs were imposed, and the connected miscellaneous petitions were closed.

Important Clarification

  • Where an assessee has an efficacious statutory appellate remedy under Section 107 of the CGST/State GST Act, the High Court will ordinarily decline to adjudicate the correctness of an assessment order in writ jurisdiction.
  • Courts frequently soften the impact of relegating a petitioner to appeal by granting a fresh, extended limitation window (here, 30 days from receipt of the order) so that the time spent in litigating the writ petition is not held against the assessee.
  • Dismissal on the ground of alternate remedy is not a finding on the merits of the assessment; the assessee remains free to raise all grounds, including procedural objections such as absence of a proper show cause notice, before the Appellate Authority.

Sections Involved

  • Section 107, CGST Act 2017 — provides the statutory appeal mechanism against orders passed by an adjudicating authority, including the limitation period for filing such appeals.
  • Form GST DRC-01 — the prescribed summary of the show cause notice that must precede a demand under the GST Act.

Decision – In Favour of

Disposed of on the threshold of alternate remedy, without a finding on the merits of the assessment. The dismissal is procedural rather than a win or loss for either side, though the grant of a fresh 30-day limitation window to approach the Appellate Authority is a limited accommodation in favour of the Assessee.

Related Case Laws

  • Posts on Section 107 CGST Act appeals and alternate remedy in GST assessment matters on this site.
  • Related posts on writ maintainability against GST demand and assessment orders.

Case Details

  • Court: Madurai Bench of the Madras High Court
  • Case No.: W.P.(MD) Nos.4355 and 4356 of 2022 with W.M.P.(MD) Nos.3681 and 3683 of 2022
  • Coram: Hon'ble Mr. Justice C. Saravanan
  • Date of Order: 11.03.2022

Link to Download the Order

https://mytaxexpert.co.in/uploads/1787067010_4497compressed.pdf

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.