Facts of the Case

M/s. Premier Auto Sales & Service, a partnership firm and authorised Mahindra & Mahindra dealer with branches across Malappuram district, is a registered dealer under the CGST Act and Kerala SGST Act supplying motor vehicles and parts. Intelligence gathered by CGST, Kozhikode Commissionerate revealed that the petitioner had not filed statutory GSTR-3B returns from May 2018 to January 2019 and had not discharged GST liability. Following investigation and an unsatisfactory response, a show cause notice dated 06.06.2022 was issued demanding Rs.8,27,93,915/- towards IGST, CGST, SGST and Cess for April 2018 to March 2019 under Section 73(1). The petitioner subsequently filed the return and deposited Rs.8,21,56,286/-, but the Additional Commissioner passed the impugned order dated 24.03.2023 confirming the demand along with interest under Section 50 and a penalty of Rs.82,79,392/- under Section 73(9) read with Section 73(11).

Issues Involved

  1. Whether the writ petition under Article 226 is maintainable against an appealable order passed under Section 73 of the CGST Act without exhausting the statutory appeal under Section 107.

Petitioner's Arguments

  • The petitioner impugned the order under Section 73 confirming the tax, interest and penalty demand, seeking the Court's intervention rather than pursuing the statutory appellate remedy.

Respondent's Arguments

  • The order was passed strictly within the jurisdiction of the first respondent and after affording the petitioner full opportunity to respond to the show cause notice and be heard.
  • The order was appealable under Section 107 of the CGST Act, and the limitation for filing appeals for assessment years 2017-18 and 2018-19 had been extended up to 31.01.2024 by Notification No.53/23.

Court Order / Findings

  • The Court, exercising limited judicial review jurisdiction, found the impugned order was neither without jurisdiction nor in violation of natural justice, as the petitioner had been afforded opportunity to respond and be heard.
  • Where an order is validly passed within jurisdiction and after due compliance with natural justice, a writ court will not entertain a challenge in place of the statutory appellate remedy under Section 107.
  • The writ petition was dismissed, but liberty was granted to the petitioner to file a statutory appeal, noting the extended limitation under Notification No.53/23 up to 31.01.2024.
  • Any interim order granted in the writ petition was directed to stand vacated.

Important Clarification

  • A taxpayer aggrieved by a Section 73 order who has been given adequate opportunity of hearing must ordinarily pursue the statutory appeal under Section 107 rather than invoke writ jurisdiction; where CBIC has extended appeal limitation by notification for specific assessment years, that extension can be availed even after dismissal of a writ petition.

Sections Involved

  • Section 73, CGST Act, 2017 - determination of tax not paid or short paid for reasons other than fraud.
  • Section 107, CGST Act, 2017 - statutory appeal against adjudication orders.
  • Section 50, CGST Act, 2017 - interest on delayed payment of tax.

Decision – In Favour of

The writ petition was dismissed, disposing the matter in favour of the Department on the maintainability point, while preserving the petitioner's right to pursue a statutory appeal within the extended limitation.

Case Details

Court: High Court of Kerala at Ernakulam
Case No.: WP(C) No. 13181 of 2023
Coram: Justice Dinesh Kumar Singh
Date of Order: 08.11.2023

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