Rudraksh Collection Vs Joint Commissioner (Appeal) (Rajasthan High Court)
Summary: Rajasthan High Court dismissed a writ petition challenging an appellate order where the petitioner had failed to file the statutory appeal within the prescribed limitation period or even within the extended condonable period. The Court relied upon its earlier decision in Ashok Varandani Vs. Central Board of Indirect Taxes and Customs & Ors., which in turn followed the Supreme Court ruling in Assistant Commissioner (CT) LTU, Kakinada & Ors. Vs. Glaxo Smith Kline Consumer Health Care Limited. The Court reiterated that once the statutory appeal as well as the maximum condonable period has expired, the statutory remedy is no longer available and Article 226 cannot ordinarily be invoked merely to overcome that limitation. It clarified, however, that writ jurisdiction may still be exercised on limited grounds such as absence of jurisdiction, violation of statute or breach of principles of natural justice. On the facts, none of those grounds was established. The petitioner’s only explanation was that returns could not be filed in time because of personal difficulty.
The Court held that such an explanation might have been relevant before the appellate authority had an appeal been filed within the permissible period, but the writ court could not assume the jurisdiction of the appellate authority and sit over its satisfaction. The Court also rejected reliance upon other Division Bench orders directing condonation of delay or entertainment of appeals, holding that those could not prevail over the Supreme Court’s authoritative pronouncement in Glaxo Smith Kline Consumer Health Care Limited. Addressing the submission that carrying on business or trade is a fundamental right, the Court observed that such right remains subject to reasonable restrictions imposed by law and that a person carrying on business is obliged to comply with the GST Act, including return-filing requirements. Consequently, no case for interference under Article 226 was made out. The petition was dismissed, while expressly granting liberty to the petitioner to apply afresh for GST registration, which the authority was directed to consider in accordance with law. ([TaxGuru][1])
Cases Discussed
- Ashok Varandani Vs. Central Board of Indirect Taxes and Customs & Ors. (Rajasthan High Court); D.B. Civil Writ Petition No.2430/2024; decided on 01.03.2024.
- Comfort Shoe Components vs. Assistant Commissioner, Ambur Vellore (Madras High Court); W.P. Nos.34770, 34774 & 34777/2023; decided on 14.12.2023.
- Assistant Commissioner (CT) LTU, Kakinada & Ors. Vs. Glaxo Smith Kline Consumer Health Care Limited (Supreme Court); (2020) 19 SCC 681.
FULL TEXT OF THE JUDGMENT/ORDER OF RAJASTHAN HIGH COURT
1. Having not filed appeal within the statutory period of limitation provided under the law and not even within the extended period, which could be condoned, this petition has been filed under Article 226 of the Constitution of India assailing the correctness and validity of the order passed in appeal.
2. This Court in the case of Ashok Varandani Vs. Central Board of Indirect Taxes and Customs & Ors. [D.B. Civil Writ Petition No.2430/2024 decided on 01.03.2024], relying upon the decision of Hon’ble Supreme Court in the case of Assistant Commissioner (CT) LTU, Kakinada & Ors. Glaxo Smith Kline Consumer Health Care Limited [(2020) 19 SCC 681] has held that where appeal has not been filed within the period of limitation and not even within the extended period of limitation seeking condonation of delay, the remedy under the statute is no longer available. It was held as below:
“7.In the case of Glaxo Smith Kline Consumer Health Care Limited (supra), the question which arose for consideration was whether the High Court in exercise of its writ jurisdiction under Article 226 of the Constitution of India, ought to entertain a challenge to the assessment order on the sole ground that the statutory remedy of appeal against that order stood foreclosed by law of limitation. On facts, that was a case where the assessee did not take recourse to remedy of appeal even though he was duly served with the order of assessment within the statutory period. Without challenging the order in appeal, respondent therein filed an application under Rule 60 of the Andhra Pradesh Value Added Tax Rules, 2005, highlighting certain errors in raising the demand based on incorrect turnover reported by the assessee. The application having been rejected, an appeal was filed. Finally, the assessee filed an appeal before the Appellate Authority against the assessment order. The appeal against the assessment order was dismissed being barred by limitation and also because no sufficient cause was made out. Thereafter, the assessee filed a writ petition in the High Court seeking quashment and setting aside of assessment order on various grounds including the ground that it was contrary to law, without jurisdiction and in violation of principles of natural justice. Prayer was also made to carry out fresh assessment. The writ petition was allowed quashing and setting aside the order of assessment relegating the matter for reconsideration. That order came to be challenged by filing an appeal, mainly on the ground that the assessee having failed to avail the statutory remedy of appeal within the prescribed time and the assessee having failed to satisfactorily explain the delay in filing the appeal, the High Court ought not to have entertained the writ petition at the instance of such person, more so because the respondent had allowed the order passed by the Appellate Authority rejecting the appeal on the ground of delay, to become final.
8. After detailed consideration, the Hon’ble Supreme Court arrived at the conclusion that in such circumstances, the writ petition was not maintainable and was liable to be dismissed. It was held thus:-
“22. Suffice it to observe that this decision is on the facts of that case and cannot be cited as a precedent in support of an argument that the High Court is free to entertain the writ petition assailing the assessment order even if filed beyond the statutory period of maximum 60 days in filing appeal. The remedy of appeal is creature of statute. If the appeal is presented by the assessee beyond the extended statutory limitation period of 60 days in terms of Section 31 of the 2005 Act and is, therefore, not entertained, it is incomprehensible as to how it would become a case of violation of fundamental right, much less statutory or legal right as such.
23. Arguendo, reverting to the factual matrix of the present case, it is noticed that the respondent had asserted that it was not aware about the passing of assessment order dated 21.6.2017 although it is admitted that the same was served on the authorised representative of the respondent on 22.6.2017. The date on which the respondent became aware about the order is not expressly stated either in the application for condonation of delay filed before the appellate authority, the affidavit filed in support of the said application or for that matter, in the memo of writ petition. On the other hand, it is seen that the amount equivalent to 12.5% of the tax amount came to be deposited on 12.9.2017 for and on behalf of respondent, without filing an appeal and without any demur – after the expiry of statutory period of maximum 60 days, prescribed under Section 31 of the 2005 Act. Not only that, the respondent filed a formal application under Rule 60 of the 2005 Rules on 8.5.2018 and pursued the same in appeal, which was rejected on 17.8.2018. Furthermore, the appeal in question against the assessment order came to be filed only on 24.9.2018 without disclosing the date on which the respondent in fact became aware about the existence of the assessment order dated 21.6.2017. On the other hand, in the affidavit of Mr. Sreedhar Routh, Site Director of the respondent company (filed in support of the application for condonation of delay before the appellate authority), it is stated that the Company became aware about the irregularities committed by its erring official (Mr. P. Sriram Murthy) in the month of July, 2018, which presupposes that the respondent must have become aware about the assessment order, at least in July, 2018. In the same affidavit, it is asserted that the respondent Company was not aware about the assessment order, as it was not brought to its notice by the employee concerned due to his negligence. The respondent in the writ petition has averred that the appeal was rejected by the appellate authority on the ground that it had no power to condone the delay beyond 30 days, when in fact, the order examines the cause set out by the respondent and concludes that the same was unsubstantiated by the respondent. That finding has not been examined by the High Court in the impugned judgment and order at all, but the High Court was more impressed by the fact that the respondent was in a position to offer some explanation about the discrepancies in respect of the volume of turnover and that the respondent had already deposited 12.5% of the additional amount in terms of the previous order passed by it. That reason can have no bearing on the justification for non-filing of the appeal within the statutory period. Notably, the respondent had relied on the affidavit of the Site Director and no affidavit of the concerned employee (P. Sriram Murthy, Deputy Manager-Finance) or at least the other employee [Siddhant Belgaonker, Senior Manager (Finance)], who was associated with the erring employee during the relevant period, has been filed in support of the stand taken in the application for condonation of delay. Pertinently, no finding has been recorded by the High Court that it was a case of violation of principles of natural justice or non-compliance of statutory requirements in any manner. Be that as it may, since the statutory period specified for filing of appeal had expired long back in August, 2017 itself and the appeal came to be filed by the respondent only on 24.9.2018, without substantiating the plea about inability to file appeal within the prescribed time, no indulgence could be shown to the respondent at all.”
9. Having examined the issue with regard to maintainability of the writ petition under Article 226 of the Constitution of India, it was concluded as below:-
“25. Taking any view of the matter, therefore, the High Court ought not to have entertained the subject writ petition filed by the respondent herein. The same deserved to be rejected at the threshold.”
10. xxxx
Having not preferred an appeal, the petition in the present case, in view of the decision of Hon’ble Supreme Court in the case of Glaxo Smith Kline Consumer Health Care Limited (supra), is not maintainable. When the petitioner failed to file his return, even a notice was issued to him to file return within 15 days. When no return was filed and the petitioner remained persistent defaulter, the Assessing Authority was left with no other option but to proceed to make best judgment assessment under Section 62 of the RGST Act, 2017. Therefore, the petitioner cannot complain of violation of principles of natural justice. The challenge to the determination under best judgment assessment, based mainly on factual aspects to the extent of tax liability, is not sustainable in view of the figure stated in the return which was filed by the assessee. All these grounds, though available to be raised by availing the remedy of appeal including extended period of limitation seeking condonation of delay, the petitioner, for reasons best known to him, did not avail the remedy.
11. Reliance placed by the learned counsel for the petitioner on the decision of the Madras High Court in the case of Comfort Shoe Components vs. Assistant Commissioner, Ambur Vellore (W.P. Nos.34770, 34774 & 34777/2023) decided on 14.12.2023, is of no avail as in view of the decision of Hon’ble Supreme Court in Glaxo Smith Kline Consumer Health Care Limited (supra), present petition is not maintainable.”
3. Reliance placed on order of the Division Bench of this Court where directions have been issued to condone the delay or to entertain the appeal, does not hold ground in view of the authoritative pronouncement of Hon’ble Supreme Court in the case of Glaxo Smith Kline Consumer Health Care Limited (supra), referred to and relied upon.
4. However, on limited grounds, a petition under Article 226 of the Constitution of India could be entertained. We do not find any ground of absence of jurisdiction, violation of statute or violation of principles of natural justice to invoke the extra-ordinary jurisdiction under Article 226 of the Constitution of India. The only ground to challenge the action of the respondents is that because of personal difficulty, the return could not be filed in time. That perhaps could be an issue for consideration, had the appeal been filed within limitation or within the extended period of limitation along with prayer for condonation of delay. The writ Court would not assume jurisdiction of appellate authority to sit over the satisfaction arrived at by the authority.
5. Therefore, on the facts of the present case, no case for interference under Article 226 of the Constitution of India is made out.
6. Learned counsel for the petitioner submitted that right to carry on business or trade is a fundamental right.
7. True it is that the right to carry on business or trade is a fundamental right but at the same time, it is subject to reasonable restrictions imposed by law. The petitioner, who carries on business, was obliged to comply with the provisions of GST Act and failure to submit return in time has been the basis to cancel registration.
8. At this stage, learned counsel for the respondents submits that the petitioner may apply for registration afresh, which shall be considered by the authority in accordance with law.
9. Giving liberty to the petitioner to apply afresh for registration, this petition is dismissed.
