M/S Royal Sundaram General Insurance Co.LTD vs. Union Of INDIA

Held

The High Court held that the writ petition cannot be entertained to bypass the statutory remedy and to avoid the condition of pre-deposit. The Court referred to its previous order in a similar writ petition (Writ Petition No.9964/2026) and Circular No. 132/2/2020-GST dated March 18, 2020, issued by the Board. This circular clarifies that appeals to the Appellate Tribunal can be filed within three months (six months for the Government) from the date of communication of the order or the date on which the President or State President of the Appellate Tribunal enters office, whichever is later. The Court found that the petitioner has a remedy of filing an appeal before the GST Tribunal against the impugned orders dated 26.04.2024, whereby the First Appellate Authority dismissed the appeals. Therefore, the writ petition was dismissed.

Facts

The petitioner, M/s Royal Sundaram General Insurance Co. Ltd., a contractor, is challenging orders related to GST for FY 2018-19 and FY 2020-21. A CERA officer conducted an inspection, alleging discrepancies in Input Tax Credit (ITC) and short payment of tax. Based on these observations, the adjudicating authority (Respondent No. 3) issued show-cause notices (SCNs) under Section 73 of the GST Act. The petitioner claims technical glitches prevented them from filing a detailed reply. Consequently, ex-parte Orders-in-Original (OIOs) were passed, confirming tax demands, interest, and penalties. The petitioner claims they were unaware of these OIOs. Statutory appeals filed before the Joint Commissioner of State Tax (First Appellate Authority) were dismissed solely on grounds of limitation/delay, without considering the merits. The petitioner argues the SCNs and OIOs were void ab initio due to lack of jurisdiction and violation of natural justice, leading them to file this writ petition.

Key Issues

1. Whether the show-cause notices (SCNs) and subsequent Orders-in-Original (OIOs) were void ab initio for want of jurisdiction and lack of independent application of mind by the adjudicating authority, as argued by the petitioner? 2. Whether the petitioner was denied a meaningful opportunity of being heard due to technical glitches on the GST portal, and if the adjudicating authority erred in proceeding ex-parte without verifying the downtime, as contended by the petitioner? 3. Whether the First Appellate Authority erred in dismissing the appeals solely on the grounds of limitation/delay without considering the merits of the case, given the petitioner's arguments regarding the void nature of the foundational SCNs and OIOs, as submitted by the petitioner? Contentions: Petitioner: The SCNs and OIOs were based on 'borrowed satisfaction' from the CERA report and lacked independent application of mind. Technical glitches on the GST portal prevented timely filing of replies, leading to a violation of natural justice. The First Appellate Authority wrongly dismissed appeals on limitation without considering the void nature of the original orders. The actions of the CERA officer lacked jurisdiction. Revenue/State: The petitioner has a statutory remedy of appeal before the GST Tribunal. The writ petition should not be entertained to bypass the statutory remedy and the condition of pre-deposit. The impugned orders are supported.