Case Law Details
Metalex Agencies Vs State Tax Officer (Kerala High Court)
Introduction: Metalex Agencies brought a writ petition before the Kerala High Court, contesting the assessment order issued under the KSGST/CGST Act, 2017 (Exhibit P-7). The petitioner’s claim for transitional credit was scrutinized, leading to discrepancies and subsequent disallowance of certain credits. The court’s decision on the availability of statutory remedies under the GST Act is pivotal in understanding the legal recourse available to taxpayers.
Detailed Analysis:
1. Petitioner’s Claim: Metalex Agencies, a registered dealer under the KSGST Act, filed returns for the financial year 2017-18, including a claim for transitional credit. However, discrepancies were noted in the claimed transitional credit during the examination of returns. This discrepancy led to the issuance of a Show Cause Notice, highlighting the alleged violations of Section 140 read with Rule 117 of the CGST Act.
2. Assessment Proceedings: The assessing authority examined the documents submitted by the petitioner and issued an order disallowing a portion of the transitional credit claimed. The petitioner was further levied with interest and penalty under the Act.
3. Writ Jurisdiction Invocation: The petitioner approached the High Court invoking writ jurisdiction under Article 226 of the Constitution, bypassing the statutory appeal provision available under Section 107 of the CGST/KSGST Act, 2017. The petitioner argued that the appeal process might be futile, especially concerning the excise duty component allegedly paid by the petitioner.
4. Court’s Decision: The High Court dismissed the writ petition, emphasizing the availability of the statutory appeal remedy. The court rejected the contention that the appeal process would be futile, as the appellate authority would thoroughly examine all documents and evidence submitted by the petitioner. The court asserted that the appeal should be decided on its own merit if pursued by the petitioner.
Conclusion: The Kerala High Court’s dismissal of the writ petition in the case of Metalex Agencies versus State Tax Officer underscores the significance of statutory remedies available under the GST Act. Despite the petitioner’s argument of potential futility in the appeal process, the court reaffirmed the importance of exhausting statutory remedies before seeking recourse through writ jurisdiction. This decision reaffirms the legal framework governing tax disputes and highlights the importance of adherence to statutory procedures in addressing tax-related grievances.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
1. Heard Mr. Shameem Ahamed for the petitioner, Ms. Jasmine M., learned Government Pleader for the 1st respondent and Mr. Thomas Mathew Nellimoottil, learned Senior Standing Counsel for the respondent Nos. 2 and 3.
2. The present writ petition has been filed impugning the Exhibit P-7 assessment order under the provisions of KSGST/CGST Act, 2017. The petitioner is a registered dealer under the provisions of the KSGST Act, 2017 and Rules made thereunder. The petitioner filed its returns for the financial year 2017-18 which were examined. Certain discrepancies in respect of the transitional credit claimed by the petitioner in the return were noticed for which the petitioner was issued Show Cause Notice. On verification of the electronic credit ledger it was noticed that the petitioner had availed CGST amount of Rs. 62,38,303/- as transitional credit for TRAN – 1 on 19.09.2017 as as per the Column No. 6(K) of the GSTR 9, petitioner had availed CGST amount of Rs. 62,38,303 as transitional credit supra. The Bill No. 15538 was not found and it was noticed the incorrect amount was claimed against other bills. Some bills were not clearly visible. Prima facie, it was observed that the petitioner had violated Section 140 read with Rule 117 of the CGST Act and Rules made thereunder in respect of his claim for transitional credit. The petitioner was issued notice asking him to produce the documents, bills, etc., to support his claim for transitional credit. The 3rd respondent examined the documents submitted by the petitioner and submitted a report before the 1st respondent for proceeding with the assessment proceedings. Again, the petitioner was issued notice under Section 73 of the CGST/KSGST Act, 2017 to support his claim for the TRAN credit availed by him as mentioned in the show cause notice. The 1st respondent took note of the report submitted by the 3rd respondent and, thereafter has passed the order. The petitioner has been disallowed the trans credit of Rs. 8,63,813/- for which interest and penalty has been levied under the Act.
3. Learned Counsel for the petitioner submits that though there is a provision for filing appeal under the provisions of Section 107 of the CGST/KSGST Act, 2017 against the impugned order in Exhibit P-7, the petitioner has approached this Court invoking writ jurisdiction under Article 226 of the Constitution of India against the said order as the appeal could be futile exercise inasmuch as the claim of the petitioner is in respect of the excise duty component allegedly paid by the petitioner.
4. This Court does not find any substance in the submission of the learned Counsel for the petitioner. The appellate authority will examine all the documents and evidence submitted by the petitioner/assessee while deciding the appeal. Therefore, I am unable to agree with the contention of the learned Counsel for the petitioner that since there is no express provision for remanding the matter back to the assessing authority, the appeal would be futile exercise.
5. Hence, considering the provision of statutory appeal available to the petitioner against the impugned order in Exhibit P-7, the present writ petition is dismissed on the ground of availability of alternative remedy. However, if the petitioner files the appeal, the same shall be decided on its own merit.
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