W.A. No.1380 of 2023 (against WP(C) 18803/2023)

Facts of the Case

The appellant, a proprietary concern holding CGST and KSGST registration, was served a notice under Section 61 of the GST Act alleging excess input tax credit claimed in 2017-18 in violation of Section 16(2)(c) of the Act. The resulting proceedings culminated in an assessment order under Section 73 dated 07.01.2022, followed by a revenue recovery notice demanding Rs.2,82,040. The appellant claimed it never received the assessment order and, being left with no other option, filed a writ petition rather than a statutory appeal. The learned Single Judge dismissed the writ petition, holding that since the order had been communicated through the GST portal, the appellant was obliged to file a statutory appeal within the prescribed limitation, which it had not done. The appellant carried the matter in a writ appeal before the Division Bench.

Issues Involved

  1. Whether intimation of the assessment order through the GST portal constituted valid service under the statute.
  2. Whether the appellant's claimed ignorance of the order excused non-filing of the statutory appeal within time.
  3. Whether the writ petition was maintainable given the statutory scheme of finality for unappealed orders under the GST Act.

Petitioner's Arguments

  • Counsel for the appellant submitted that it was only due to the peculiar circumstance of not being aware of the assessment order that it could not take steps to file the appeal within time, and sought interference on this basis.

Respondent's Arguments

  • The Government Pleader supported the Single Judge's finding that the assessment order had been served in the manner prescribed under the statute, namely through intimation on the GST portal, and that the appellant's failure to avail the statutory appeal within the limitation period, including the condonable period, could not be excused.

Court Order / Findings

  • The Division Bench held it was not in dispute that the assessment order was served on the appellant in the manner prescribed under the statute — through intimation on the GST portal — and that the appellant, not having availed the alternate statutory remedy, could not feign ignorance of the statutory scheme of finality attaching to unappealed orders under the GST Act.
  • Relying on the Supreme Court's decisions in Assistant Commissioner (CT) LTU, Kakinada v. Glaxo SmithKline Consumer Health Care Limited and ONGC v. Gujarat Energy Transmission Corporation, the Bench held that a High Court ought not to entertain a writ petition as a matter of course where an effective alternative statutory remedy was available and unavailed.
  • Finding no reason to interfere with the Single Judge's judgment, the Division Bench dismissed the writ appeal.

Important Clarification

  • Communication of an assessment order through the GST common portal is treated as valid, statutorily prescribed service, and a taxpayer cannot rely on its own failure to check the portal to justify bypassing the statutory appeal in favour of a writ petition.
  • The GST Act's scheme of finality for orders not appealed within the prescribed limitation (including the condonable period) is strictly enforced by writ courts, consistent with the Supreme Court's guidance on the limited scope for entertaining writs where an effective statutory remedy exists.

Sections Involved

  • Section 16(2)(c), GST Act — conditions for availment of input tax credit, alleged to have been violated.
  • Section 61, GST Act — scrutiny of returns, under which the initial notice was issued.
  • Section 73, GST Act — determination of tax not paid or ITC wrongly availed, for reasons other than fraud.
  • Section 107, GST Act — statutory appeal remedy against an assessment order, held to be the mandatory recourse.

Decision – In Favour of

The decision is in favour of the Department, with the writ appeal dismissed and the assessment order left to stand on account of the appellant's failure to avail the statutory appeal remedy.

Case Details

Court: High Court of Kerala at Ernakulam (Division Bench)
Case Number: W.A. No.1380 of 2023 (against WP(C) 18803/2023)
Coram: Hon'ble Mr. Justice A.K. Jayasankaran Nambiar and Hon'ble Mr. Justice Mohammed Nias C.P.
Date of Judgment: 02.08.2023

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