Madras HC Directs GST Appeal on Non-Taxable Receipts

Ragem Motors Vs State Tax Officer-IV (Inspection) (Madras High Court)

In the case of Ragem Motors Vs State Tax Officer-IV (Inspection), the Madras High Court addressed a writ petition challenging a GST assessment order for the 2017–2018 financial year. The petitioner contended that GST was already paid on taxable income but argued against the demand for GST on non-taxable receipts, including CENVAT credit, income tax refunds, and interest income. The petitioner alleged that the assessment order was non-speaking, as it failed to verify documents or justify the demand despite the petitioner’s response to the show cause notice.

The court dismissed the writ petition, citing the availability of a statutory appellate remedy under Section 107 of the GST Act, 2017. The petitioner was granted liberty to file an appeal with the Deputy Commissioner (CT) (GST Appeal), Madurai, within two weeks. The court directed the appellate authority to consider the appeal without regard to the period of limitation and resolve it within two months. This decision underscores the principle of exhausting statutory remedies before invoking writ jurisdiction.

FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT

This writ petition is filed challenging the assessment order passed by the respondent, for the Assessment Year 2017-2018.

2. With the consent of both sides, this Writ Petition is taken up for final disposal at the admission stage itself.

3. The learned counsel for the petitioner submits that the petitioner has duly paid GST on the income reported under various heads during the GST period. The learned counsel further submits that the demand for GST on non-taxable receipts, such as CENVAT credit, income tax refund and interest income, is not legally sustainable. Further, the respondent has passed a non-speaking order, failing to properly verify the documents or consider the reply to the show cause notice and confirmed the demand without any justification.

4. Mr. J. K.J ayaselan, learned Government Advocate appearing for the respondent submits that the petitioner is having an appeal remedy before the Deputy Commissioner (CT) (GST Appeal), Madurai, under Section 107 of the GST Act, 2017. However, without invoking the appeal remedy, the petitioner has straightaway approached this Court.

5. Recording the submission made by the learned Government Advocate that the petitioner is having an appeal remedy before the Deputy Commissioner (CT) (GST Appeal), Madurai, under Section 107 of the GST Act, 2017, this writ petition is disposed of, with liberty to the petitioner to approach the appellate authority and raise all the grounds raised in this writ petition in the appeal. In the event, if any appeal is filed within a period of two weeks from the date of receipt of a copy of this order, the appellate authority shall entertain the appeal without reference to the period of limitation and dispose of the same in accordance with law, within a period of two months thereafter. There shall be no order as to costs. Consequently, connected Miscellaneous Petition is closed.