Tvl. Kodai Automobiles Limited vs. The Assistant Commissioner (St)

Held

The Court held that it could not decide the merits of the case under Article 226 of the Constitution of India. However, considering the petitioner's severe financial constraints, the ongoing SARFAESI Act proceedings, and its account becoming a non-performing asset, the Court exercised its discretion in favour of the petitioner. The Court directed the petitioner to file a statutory appeal within 30 days of receiving the order, subject to depositing 10% of the disputed tax from its electronic cash ledger, as contemplated under Section 107 of the GST enactments. Upon compliance, the appellate authority (suo motu impleaded Deputy Commissioner (GST) (Appeals)(State Tax)) was directed to entertain the appeal, dispose of it on merits without reference to the limitation period, and do so expeditiously, preferably within three months thereafter. The issue regarding the merits of the assessment was expressly left undecided.

Facts

The petitioner, Tvl.Kodai Automobiles Limited, filed a writ petition challenging an assessment order dated 28.12.2023 passed by the Assistant Commissioner (ST) for the assessment year 2017-18. The petitioner had received a notice, filed a reply, and appeared for a personal hearing. However, they failed to file a statutory appeal within the prescribed time. The revenue contended that the writ petition was time-barred and the appellate remedy was also expired, citing Supreme Court decisions. The petitioner argued that they faced an unjust demand, had unutilized input tax credit of Rs. 42 lakhs, and were a sick unit facing proceedings under the SARFAESI Act, 2002, which had crippled their operations.

Key Issues

1. Whether the High Court can entertain a writ petition challenging an assessment order when the statutory appellate remedy is available but time-barred, and if so, under what circumstances? (Article 226 of the Constitution of India). Petitioner's arguments: The petitioner contended that they were subjected to an unjust demand, had significant unutilized input tax credit, and were facing severe financial distress due to SARFAESI Act proceedings, justifying extraordinary intervention by the High Court. They sought an opportunity to explain their case afresh. Revenue's arguments: The revenue argued that the writ petition was hopelessly time-barred due to the petitioner's latches. They further contended that the statutory appeal under Section 107 of the GST enactments was also time-barred, citing Supreme Court judgments in Assistant Commissioner (CT) LTU, Kakinada and others vs. Glaxo Smith Kline Consumer Health Care Limited and Singh Enterprises Vs. Commissioner of Central Excise, Jamshedpur and others, and thus the writ petition should be dismissed.