Ashok Varandani, Proprietor Of M/S Kamaldeep Printers vs. Central Board Of Indirect Taxes And Customs
Original PDF →Facts
The petitioner, Ashok Varandani, proprietor of M/s Kamaldeep Printers, filed a writ petition challenging an ex-parte assessment order dated April 12, 2023, passed by the Assistant Commissioner, Circle-I, Jaipur. The petitioner sought a declaration that his GSTR-3B return for February 2023 should hold primacy over the best judgment assessment and requested the de-attachment of his bank account. The petitioner admitted to financial constraints preventing him from filing the February 2023 GSTR-3B return by the due date. Despite receiving a notice under Section 46 of the RGST Act, 2017, he failed to file the return within 15 days. Subsequently, he belatedly filed the return on August 29, 2023, under the impression that this would nullify the best judgment assessment. Due to this misconception, he did not pursue the statutory remedy of appeal. Recovery proceedings led to the attachment of his bank accounts, prompting the filing of this writ petition.
Held
The Court held that the writ petition is not maintainable. The petitioner failed to file his return for February 2023 by the due date, and even after receiving a notice under Section 46 of the RGST Act, 2017, he did not file it within the stipulated 15 days. Consequently, the Assessing Authority was justified in proceeding with a best judgment assessment under Section 62 of the RGST Act, 2017. The Court noted that the petitioner was aware of the best judgment assessment but failed to avail the efficacious statutory remedy of appeal within the prescribed limitation period, including the extended period for filing with condonation of delay. The petition was filed only after the entire limitation period expired. Citing the Supreme Court's decision in Assistant Commissioner (CT) LTU, Kakinada & Ors. vs. Glaxo Smith Kline Consumer Health Care Limited, the Court concluded that a writ petition challenging an assessment order is not maintainable when the statutory remedy of appeal has been foreclosed by limitation and the petitioner has not satisfactorily explained the delay. Therefore, the writ petition was dismissed at the threshold.
Key Issues
1. Whether the petitioner's belatedly filed GSTR-3B return for February 2023 holds primacy over the best judgment assessment order dated April 12, 2023, passed by the Assistant Commissioner, Circle-I, Jaipur, under Section 62 of the RGST Act, 2017? Petitioner's arguments: The petitioner contended that the best judgment assessment was passed without collecting necessary information and without affording an opportunity of hearing. He argued that his GSTR-3B return, though filed belatedly, should be given precedence. He also argued that Sections 16(2), 39, read with Sections 46 & 47 of the GST Act permit filing of monthly returns after the due date. He claimed to have acted under a wrong notion of fact and law, leading him to miss the statutory appeal remedy. Revenue's arguments: The respondents argued that the petitioner was a persistent defaulter, failing to file his return even after a notice under Section 46 and subsequently failing to avail the statutory remedy of appeal against the best judgment assessment order within the prescribed limitation period. They relied on the Supreme Court's decision in Assistant Commissioner (CT) LTU, Kakinada & Ors. vs. Glaxo Smith Kline Consumer Health Care Limited.
Sections Cited
Section 16(2), Section 39, Section 46, Section 47, Section 62
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
Order 04/03/2024
Heard on admission.
By this writ petition filed under Article 226 of the Constitution of India, the petitioner has assailed an ex-parte assessment order dated 12.04.2023 passed by the third respondent, namely, the Assistant Commissioner, Circle-I, Jaipur I
[2024:RJ-JP:11215-DB] (2 of 8) [CW-2422/2024] Ward-II, Commercial Taxes Department, Jaipur. The petitioner has sought declaration that his statutory return in Form GSTR-3B for the month of February, 2023 is valid and the declaration made therein by the petitioner holds primacy over the determination of liability in best judgment assessment. A prayer has also been made to de-attach the bank account of the petitioner. The petitioner has also prayed for declaration that Section 16(2), 39 read with Sections 46 & 47 of the GST Act permit filing of a monthly return after the due date.
Learned counsel for the petitioner contended that due to financial constraint the petitioner could not file his return under Section 39 in Form GSTR-3B for the period of Frebruary, 2023, due to which a notice under Section 46 of the Rajasthan Goods & Services Tax Act, 2017 (for short, "RGST Act, 2017"), was issued to him requiring him to file Form GSTR-3B for the period of February, 2023 within 15 days. It is further submitted that financial constraint continued and return could not be filed within the stipulated period. Thereafter, the third respondent proceeded with best judgment assessment under Section 62 of the RGST Act, 2017, it being assessment for non-filers of return, the petitioner, though belatedly, filed his return under Section 39 in Form GSTR- 3B for the period of February, 2023 on 29.08.2023 on the basis of self assessment of tax. The petitioner carried notion and impression that since he had filed return under Section 39, though belatedly, the best judgment assessment would be withdrawn. Because of such an impression, the petitioner did not take recourse to remedy of appeal and when recovery notice was issued against him, his bank accounts were attached. As the best
[2024:RJ-JP:11215-DB] (3 of 8) [CW-2422/2024] judgment assessment is without collecting necessary information and without affording any opportunity of hearing, and the petitioner under wrong notion of fact and law could not avail the statutory remedy of appeal, the present writ petition has been filed.
Though several contentions based on merits of the case, particularly that the determination of tax under best judgment assessment is not in accord with the return filed by the petitioner, we find that the petitioner, right from the beginning, has been a defaulter. Firstly, he did not file his return under Section 39 in Form GSTR-3B for the period of February, 2023, even though he was served with a notice under Section 46 of the RGST Act, 2017 requiring him to file his return in the Form GSTR-3B for February, 2023 within 15 days. The petitioner again remained negligent and did not care to file his return within a period of 15 days as per notice dated 25.03.2023. In such circumstances, the Assessing Authority was left with no option but to proceed to make best judgment assessment, as provided under Section 62 of the RGST Act, 2017. 5. It is not the case of the petitioner that the best judgment assessment was not known to him. Though he had an efficacious statutory remedy of filing an appeal even against the best judgment assessment on grounds available to him under the law, the petitioner again did not avail his alternative remedy of appeal against the best judgment assessment. Not only the entire period of limitation was allowed to expire, but even the extended period within which the appeal could be filed alongwith an application for condonation of delay, also expired and the petitioner filed this
[2024:RJ-JP:11215-DB] (4 of 8) [CW-2422/2024] petition as late as on 08.02.2024 assailing the assessment order. Thus, the petitioner committed default at every stage. The legislative scheme of the RGST Act, 2017 provided him a remedy of appeal where he could have raised all the grounds, he chose to remain indolent.
In the case of Assistant Commissioner (CT) LTU, Kakinada & Ors. vs. Glaxo Smith Kline Consumer Health Care Limited, reported in (2020) 19 SCC 681, the question which arose for consideration was whether the High Court in exercise of its writ juri iction under Article 226 of the Constitution of India, ought to entertain a challenge to the assessment order on the sole ground that the statutory remedy of appeal against that order stood foreclosed by law of limitation. On facts, that was a case where the assessee did not take recourse to remedy of appeal even though he was duly served with the order of assessment within the statutory period. Without challenging the order in appeal, respondent therein filed an application under Rule 60 of the Andhra Pradesh Value Added Tax Rules, 2005, highlighting certain errors in raising the demand based on incorrect turnover reported by the assessee. The application having been rejected, an appeal was filed. Finally, the assessee filed an appeal before the Appellate Authority against the assessment order. The appeal against the assessment order was dismissed being barred by limitation and also because no sufficient cause was made out. Thereafter, the assessee filed a writ petition in the High Court seeking quashment and setting aside of assessment order on various grounds including the ground that it was contrary to law, without juri iction and in violation of
[2024:RJ-JP:11215-DB] (5 of 8) [CW-2422/2024] principles of natural justice. Prayer was also made to carry out fresh assessment. The writ petition was allowed quashing and setting aside the order of assessment relegating the matter for reconsideration. That order came to be challenged by filing an appeal, mainly on the ground that the assessee having failed to avail the statutory remedy of appeal within the prescribed time and the assessee having failed to satisfactorily explain the delay in filing the appeal, the High Court ought not to have entertained the writ petition at the instance of such person, more so because the respondent had allowed the order passed by the Appellate Authority rejecting the appeal on the ground of delay, to become final.
After detailed consideration, the Hon'ble Supreme Court arrived at the conclusion that in such circumstances, the writ petition was not maintainable and was liable to be dismissed. It was held thus:- "
Suffice it to observe that this decision is on the facts of that case and cannot be cited as a precedent in support of an argument that the High Court is free to entertain the writ petition assailing the assessment order even if filed beyond the statutory period of maximum 60 days in filing appeal. The remedy of appeal is creature of statute. If the appeal is presented by the assessee beyond the extended statutory limitation period of 60 days in terms of Section 31 of the 2005 Act and is, therefore, not entertained, it is incomprehensible as to how it would become a case of violation of fundamental right, much less statutory or legal right as such.
Arguendo, reverting to the factual matrix of the present case, it is noticed that the respondent had asserted that it was not aware about the passing of assessment order dated 21.6.2017 although it is admitted that the same was served on the authorised representative of the respondent on 22.6.2017. The date on which the respondent became aware about
[2024:RJ-JP:11215-DB] (6 of 8) [CW-2422/2024] the order is not expressly stated either in the application for condonation of delay filed before the appellate authority, the affidavit filed in support of the said application or for that matter, in the memo of writ petition. On the other hand, it is seen that the amount equivalent to 12.5% of the tax amount came to be deposited on 12.9.2017 for and on behalf of respondent, without filing an appeal and without any demur - after the expiry of statutory period of maximum 60 days, prescribed under Section 31 of the 2005 Act. Not only that, the respondent filed a formal application under Rule 60 of the 2005 Rules on 8.5.2018 and pursued the same in appeal, which was rejected on 17.8.2018. Furthermore, the appeal in question against the assessment order came to be filed only on 24.9.2018 without disclosing the date on which the respondent in fact became aware about the existence of the assessment order dated 21.6.2017. On the other hand, in the affidavit of Mr. Sreedhar Routh, Site Director of the respondent company (filed in support of the application for condonation of delay before the appellate authority), it is stated that the Company became aware about the irregularities committed by its erring official (Mr. P. Sriram Murthy) in the month of July, 2018, which presupposes that the respondent must have become aware about the assessment order, at least in July, 2018. In the same affidavit, it is asserted that the respondent Company was not aware about the assessment order, as it was not brought to its notice by the employee concerned due to his negligence. The respondent in the writ petition has averred that the appeal was rejected by the appellate authority on the ground that it had no power to condone the delay beyond 30 days, when in fact, the order examines the cause set out by the respondent and concludes that the same was unsubstantiated by the respondent. That finding has not been examined by the High Court in the impugned judgment and order at all, but the High Court was more impressed by the fact that the respondent was in a position to offer some explanation about the discrepancies in respect of the volume of turnover and that the respondent had already deposited 12.5% of the additional amount in terms of the previous order passed by it. That reason can have no bearing on the justification for non-filing of the appeal within the statutory period. Notably, the respondent had relied on the affidavit of the Site Director and no affidavit of the concerned employee (P. Sriram Murthy, Deputy Manager-Finance) or at least the other employee [Siddhant Belgaonker, Senior Manager (Finance)], who was associated with the erring employee during the relevant period, has
[2024:RJ-JP:11215-DB] (7 of 8) [CW-2422/2024] been filed in support of the stand taken in the application for condonation of delay. Pertinently, no finding has been recorded by the High Court that it was a case of violation of principles of natural justice or non-compliance of statutory requirements in any manner. Be that as it may, since the statutory period specified for filing of appeal had expired long back in August, 2017 itself and the appeal came to be filed by the respondent only on 24.9.2018, without substantiating the plea about inability to file appeal within the prescribed time, no indulgence could be shown to the respondent at all."
Having examined the issue with regard to maintainability of the writ petition under Article 226 of the Constitution of India, it was concluded as below:- "
Taking any view of the matter, therefore, the High Court ought not to have entertained the subject writ petition filed by the respondent herein. The same deserved to be rejected at the threshold."
Present is a case where the petitioner did not even file the appeal and allowed the order passed in assessment to become final and then filed writ petition seeking to challenge the determination through best judgment assessment, mainly on the basis of incorrect determination of tax liability in the light of return belatedly filed by the petitioner. Present is not a case where from the date of notice, return was either filed within the prescribed period, or even within the extended period under notice given to the petitioner. Even best judgment assessment was not challenged by filing an appeal and period of filing of appeal was allowed to expire. It was only thereafter that the writ petition was filed. Having not preferred an appeal, the petition in the present case, in view of the decision of Hon'ble Supreme Court in the case of Glaxo Smith Kline Consumer Health Care Limited (supra), is not maintainable. When the petitioner failed to file his return,
[2024:RJ-JP:11215-DB] (8 of 8) [CW-2422/2024] Vellore (W.P. Nos.34770, 34774 & 34777/2023) decided on 14.12.2023, is of no avail as in view of the decision of Hon'ble Supreme Court in Glaxo Smith Kline Consumer Health Care Limited (supra), present petition is not maintainable.
Therefore, in view of the decision of Hon'ble Supreme Court in the case of Glaxo Smith Kline Consumer Health Care Limited (supra), present petition is liable to be dismissed and is accordingly dismissed.
Pending application, if any, also stands dismissed. (BHUWAN GOYAL),J (MANINDRA MOHAN SHRIVASTAVA),CJ Kamlesh Kumar/35
Reproduced from the public record of the Rajasthan High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.