Ritesh Mitra Vs Assistant Commissioner of State Tax (Orissa High Court)
The Orissa High Court considered a writ petition challenging an Order dated 5 August 2024 passed under Section 74 of the Central Goods and Services Tax Act, 2017 and the Odisha Goods and Services Tax Act, 2017, concerning tax periods from 01.04.2021 to 31.03.2022, along with a Rectification Order dated 7 March 2026 passed under Section 161.
The petitioner contended that the assessment order was passed without serving a proper Show Cause Notice under Section 74 and that merely serving a Summary of Show Cause Notice dated 17 February 2024 was insufficient. It was also contended that the rectification proceedings were kept pending for more than one and a half years and the impugned order was barred by limitation.
The CT & GST Organization opposed the writ petition, submitting that the orders were passed in accordance with the statutory provisions. It relied on the notice in Form GST-01 and its annexure, which identified the objection concerning non-disclosure of certain turnover in the returns for 2021-22, despite the amount being reflected in the Works and Accounts Management Information System.
The Court observed that a defect in a notice may not vitiate jurisdiction unless it goes to the root of the matter and the resulting order is passed without adherence to natural justice. It further found that the discrepancy identified by the authority had been communicated to the petitioner through the annexure to Form GST DRC-01. The Court held that the disputed factual and legal issues could be considered by the appellate or other statutory authorities under the GST Act and Rules.
Relying on Radha Krishan Industries Vrs. State of Himachal Pradesh, (2021) 3 SCR 406, the Court noted the principle concerning availability of an effective alternative statutory remedy and declined to exercise its discretionary jurisdiction under Article 226.
Accordingly, the writ petition and pending interlocutory applications, if any, were dismissed. However, the petitioner was granted liberty to approach the appropriate forum available under the GST Act, 2017 and the Rules.
Cases Discussed
- Radha Krishan Industries Vrs. State of Himachal Pradesh (Supreme Court), (2021) 3 SCR 406
FULL TEXT OF THE JUDGMENT/ORDER OF ORISSA HIGH COURT
1. Assailed in the writ petition are the Order dated 5th August, 2024 passed under Section 74 of the Central Goods and Services Tax Act, 2017 and the Odisha Goods and Services Tax Act, 2017 (Collectively, “GST Act”) pertaining to tax periods from 01.04.2021 to 31.03.2022 (Annexure-2) read with Rectification Order dated 7th March, 2026 by the Assistant Commissioner of State Tax, Bargarh Circle, Sambalpur, on the grounds inter alia that without issuing Show Cause Notice for initiation of proceeding under Section 74, the final order raising demand could not have been passed and the Rectification Order under Section 161 being kept passed keeping the application for more than one and half years, the order impugned is barred by limitation.
2. It is submitted by the learned counsel for the petitioner that Order-in-Original dated 5th August, 2024 passed by the Assistant Commissioner of State Tax, Bargarh Circle, Sambalpur, cannot be sustained in the eye of law inasmuch as it has been passed without serving Show Cause Notice on the petitioner. Therefore, there is no initiation of proceeding under Section 74 of the GST Act in the eye of law. Arguments are expanded by submitting that mere service of Summary of Show Cause Notice dated 17th February, 2024 would not suffice to invoke jurisdiction under Section 74 of the GST Act. Contending that the authority having not applied conscientious mind by adhering to the statutory mandate the orders impugned are liable to be quashed.
3. Vehemently opposing entertainment of writ petition against the orders impugned, challenge against which is the domain for the authorities conferred with the power under the GST Act and the Rules framed thereunder, Mr. Sunil Mishra, learned Standing Counsel appearing for the CT & GST Organization would submit that the Order-in-Original as well as the Rectification Order has been passed having due regard to the statutory provisions. Drawing attention of this Court to Annexure-1, e., Notice in Form GST-01 it is submitted that the Annexure appended to said notice clearly reveals the allegation/objection to be met by the petitioner. This annexure with precision made it known to the petitioner that in the returns furnished for the tax periods 2021-22 the taxable person concealed to disclose certain turnover though the amount is reflected in the Works and Accounts Management Information System.
4. Heard Mr. Jaish Joshi, learned counsel for the petitioner and Mr. Sunil Mishra, learned Standing Counsel appearing for the CT & GST Organization.
5. At the outset, it may be apposite to observe that mere defect in the notice may not vitiate jurisdiction to initiate proceeding unless such notice goes to the root of the matter and the order passed thereon is passed without adhering to the principles of natural justice. Lack of jurisdiction to issue notice under Section 74 of the GST Act for finding discrepancy in the figures disclosed in the returns can be considered by the Appellate Authority or, as the case may be, the Goods and Services Tax Appellate Tribunal. This Court on a bare perusal of Annexure appended to the Notice in Form GST DRC-01 finds that discrepancy noticed by the authority concerned has been made known to the petitioner. If the petitioner is aggrieved with such allegation, and could not place before the Adjudicating Authority at the first instance, there is ample scope for him to agitate grievance before the statutory authorities empowered in this behalf for consideration of factual merit of the matter. The statutory authorities are clothed with power to adjudicate not only the facts but also the legal perspective of the subject-matter for which they are created. The nature of grounds as pressed into service by the counsel for the petitioner in the writ petition, in the considered opinion of this Court, can be appreciated by the authorities under the GST Act and the Rules framed thereunder on perusal of connected records of the Authorities below. Therefore, such disputed question of fact is to be left for the appropriate authority to consider.
6. The Hon’ble Supreme Court in Radha Krishan Industries Vrs. State of Himachal Pradesh, (2021) 3 SCR 406, held, inter alia, that where an effective alternative remedy is available to the aggrieved person, the High Court ought to restrain itself from exercising power under Article 226 of the Constitution of India and when a right is created by statute, which itself prescribes the remedy or procedure for enforcing the right or liability, resort must be had to that particular statutory remedy before invoking the discretionary remedy under Article 226 of the Constitution of India. It is made clear that this rule of exhaustion of statutory remedies is a rule of policy, convenience and discretion.
7. In view of such enunciation of principles by the Hon’ble Supreme Court of India, this Court desists from entertaining this writ petition questioning the legality of the orders assailed herein. However, liberty is granted to the petitioner, if so advised, to approach appropriate forum as available under the Goods and Services Tax Act, 2017 and Rules framed thereunder.
8. With the aforesaid observation, the writ petition along with the pending Interlocutory Application (s), if any, shall stand dismissed.
