K. Seshagiri Rao And Co. A Partnership Firm vs. Union Of INDIA And Ors.
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The appellant, K. Seshagiri Rao & Co., filed a writ petition challenging an order in original dated December 8, 2023, passed by an adjudicating authority. The High Court, by an order dated April 2, 2024, disposed of the writ petition by directing the appellant to avail the statutory remedy. The appellant then filed this intra-Court appeal against the High Court's order. The adjudicating authority had passed the order after considering the appellant's reply to a show-cause notice, but the appellant had not availed the opportunity for a personal hearing. The High Court noted that a full adjudication of the factual position was required, which could not be done in a writ petition based on affidavits.
Held
The Court held that a full adjudication into the factual position was required to appreciate the contentions raised, which could not be done in a writ petition under Article 226 of the Constitution of India, as it is based on affidavits. The Court found that the appellant has an effective alternate remedy in terms of Section 107(1) of the GST Act, 2017, before the Commissioner (Appeals). The appellate authority is entitled to appreciate and re-appreciate the factual position and take a decision. The Court stated that merely because the appellant has to comply with the pre-deposit condition will not render the appellate remedy as ineffective or illusory. Therefore, the Court found no ground to interfere with the order passed by the learned Single Bench. The appellant was granted 30 days to file the appeal, and the Commissioner (Appeals) was directed to entertain the appeal without rejecting it on the ground of limitation. The Court also noted that it would be open for the appellant to plead before the appellate authority regarding the pre-deposit condition, and the appellate authority shall consider the same.
Key Issues
1. Whether the High Court was justified in directing the appellant to avail the statutory remedy under Section 107(1) of the GST Act, 2017, instead of adjudicating the writ petition on merits, given the factual complexities involved? Arguments for the Appellant: The appellant contended that the High Court should have adjudicated the matter on merits, as the factual position was complex and required a detailed examination. They argued that directing them to the statutory remedy, which involves pre-deposit, would render the remedy ineffective or illusory, especially if they had already paid taxes. Arguments for the Respondents: The respondents argued that the appellant had an effective alternate statutory remedy available under Section 107(1) of the GST Act, 2017, before the Commissioner (Appeals). They contended that the appellate authority is empowered to re-appreciate the factual position and that the pre-deposit condition does not make the remedy ineffective.
Sections Cited
Section 107(1)
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
JUDGMENT (Judgment of the Court was delivered by T.S. SIVAGNANAM, C.J.)
This intra-Court appeal by the writ petitioner is directed against the order dated 2nd April, 2024 by which the writ petition filed by the appellant challenging an order in original passed by the adjudicating authority dated 8th December, 2023 was disposed of by directing the appellant to avail the statutory remedy.
We have elaborately heard the learned advocate appearing for the appellant and the learned Senior Standing counsel for the respondents.
As could be seen from the adjudication order, the authority has given certain reasons after taking note of the reply given by the assessee to the show-cause notice. Unfortunately, the assessee did not avail the opportunity of personal hearing.
After perusing the material documents placed in this appeal, we find that to appreciate the contentions, which have been raised in this appeal as well as in the writ petition, a full-fledged adjudication into the factual position is required. Such exercise cannot be done in a writ petition under Article 226 of the Constitution of India, where the Court has to decide the matter based on affidavits.
That apart, the appellant has got an effective alternate remedy in terms of Section 107(1) of the GST Act, 2017 before the Commissioner (Appeals). The appellate authority will be entitled to appreciate and re-appreciate the factual position and take a decision in the matter. Merely because the appellant will have to comply with the pre-deposit condition will not render the appellate remedy as ineffective or illusory.
Therefore, the appellant has to avail the appellate remedy available under the Act.
For the above reasons, we find no ground to interfere with the order passed by the learned Single Bench and the appeal along with the connected application (CAN 1 of 2024) stand dismissed.
The appellant is granted 30 days time to file the appeal from the date of receipt of server copy of this order and if the appeal is filed, the 2 2
Commissioner (Appeals) shall entertain the appeal without rejecting the same on the ground of limitation.
So far as the pre-deposit condition is concerned, it will be open to the appellant to plead before the authority that they have already paid the taxes and they should not be further burdened to pay 10% of the disputed tax as quantified in the adjudication order. If such prayer is made, the appellate authority shall also consider the same.
No costs.
Urgent photostat certified copy of this order, if applied for, be furnished to the parties expeditiously upon compliance of all legal formalities.
(T.S. SIVAGNANAM) CHIEF JUSTICE I agree. (HIRANMAY BHATTACHARYYA, J.)
Pallab/KS AR(Ct.) 3 3
Reproduced from the public record of the Calcutta High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.