Case Law Details
N.G.K Infra Ventures Pvt Ltd Vs State of U.P (Allahabad High Court)
In a significant ruling, the Allahabad High Court has emphasized the necessity of utilizing the appeal provisions in tax disputes. The case of N.G.K Infra Ventures Pvt Ltd Vs State of U.P (Allahabad High Court) highlights the court’s stance on adhering to procedural remedies available under the law, specifically Section 107 of the UPGST/CGST Act. This ruling reinforces the judicial principle that statutory remedies must be exhausted before seeking judicial intervention.
Case Background
N.G.K Infra Ventures Pvt Ltd filed a writ petition challenging an order dated December 18, 2023, issued under Section 73 of the UPGST/CGST/IGST Act, 2017 by the Deputy Commissioner, State Tax, Sector 12, Lucknow. The order imposed a tax liability amounting to Rs. 1,20,95,308.21, inclusive of interest and penalties. The petitioner argued that the order was issued in violation of statutory provisions and without providing an opportunity for a hearing.
Arguments Presented
The petitioner contended that the impugned order was passed without due process and violated their right to a fair hearing. Conversely, the learned Standing Counsel for the respondents argued that the petitioner had been duly notified but failed to appear before the authority. Therefore, the order was passed in their absence. Moreover, the Standing Counsel highlighted that an efficacious remedy of appeal was available to the petitioner under Section 107 of the UPGST/CGST Act.
Court’s Observations
The Allahabad High Court, after hearing both parties, observed that the petitioner had the opportunity to contest the assessment through the appellate mechanism provided in the GST Act. The court referred to the Supreme Court’s judgment in Commissioner of Income Tax & Others Vs. Chhabil Dass Agarwal, where it was held that in matters involving tax disputes, the statutory provision of appeal should be utilized.
The court asserted that all grounds raised by the petitioner could be adequately addressed by the appellate authority. It was noted that the petitioner claimed the assessed tax and penalty were excessive and sought interim protection until the appeal could be filed.
Court’s Direction
The court directed that if the petitioner files an appeal along with an application for interim relief within two weeks, the appellate authority should consider and pass appropriate orders on the application within ten days. Until such orders are passed, no coercive action should be taken against the petitioner. The court made it clear that the protection granted would cease once the appellate authority issues its orders.
Conclusion
The ruling in N.G.K Infra Ventures Pvt Ltd Vs State of U.P underscores the importance of following statutory appeal provisions in tax matters. By directing the petitioner to file an appeal under Section 107 of the UPGST/CGST Act, the Allahabad High Court reinforced the principle that judicial interventions are secondary to statutory remedies. This decision serves as a reminder for taxpayers to utilize available legal avenues before seeking judicial relief, ensuring that the appellate mechanisms are not bypassed.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard Sri Manoj Kumar Mishra, learned counsel for the petitioner as well as learned Standing Counsel for the respondents.
2. By means of present writ petition, the petitioner has challenged the order dated 18.12.2023, passed u/s 73 of U.P.GST/CGST/IGST Act, 2017 passed by the Deputy Commissioner, State Tax, Sector, Sector 12, Lucknow, whereby imposing tax for an amount of Rs.1,20,95,308.21, amount which includes the interest and penalty due upon the petitioner.
3. The petitioner submitted that he has assailed the said order on the ground that the same has been passed in violation of the statutory provision as well as no opportunity of hearing was given to the petitioner before passing of the said order.
4. Learned Standing Counsel on the other hand has opposed the writ petition. He has submitted that notice was duly served upon the petitioner who despite service of notice did not appear before the authority to defend the said notice and accordingly the impugned order has been passed assessing tax upon the petitioner. He further submits that the petitioner, in any case, has equally efficacious remedy of an appeal as provided u/s 107 of the UPGST/CGST Act and even according to the judgement of the Hon’ble Supreme Court in the case of Commissioner of Income Tax & Others Vs. Chhabil Dass Agarwal reported in 2014 (1) SCC 603, it has been held matters involving tax where provision of appeal is provided, the assessee should be relegated to the said remedy.
5. Accordingly, this court is of the considered view that all the grounds raised by the petitioner assailing the said assessment can be duly considered by the appellate authority in appeal.
6. It is submitted by learned counsel for the petitioner that the amount of tax and penalty assessed is on the higher side and accordingly submits that he should be protected till such time appeal is filed. This court is of the view that all issues raised by the petitioner in the present writ petition can be adequately considered in appeal and accordingly the petitioner is relegated to his remedy of an appeal u/s 107 of the UPGST Act.
7. It is provided, in case such an appeal is filed within the next two weeks along with an application for interim relief, the appellate authority shall duly consider the said application and pass appropriate orders thereon, within 10 days thereafter in accordance with law.
8. Till appropriate orders on the stay application are passed by the appellate authority, no coercive action shall be taken against the petitioner.
9. It is made clear that on passing of the orders by the appellate authority, the protection granted by this court shall cease to have any effect.
10. With the aforesaid direction, the present petition is disposed of.
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