Rajasthan High Court

M/S Goyal Stone Art vs State Of Rajasthan ... on 4 April, 2024

Bench: Manindra Mohan Shrivastava, Bhuwan Goyal

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           HIGH COURT OF JUDICATURE FOR RAJASTHAN
                       BENCH AT JAIPUR

                    D. B. Civil Writ Petition No. 1622/2024

    M/s Goyal Stone Art, through its Proprietor Pankaj Goyal S/o
    Suresh Goyal, aged about 40 years, R/o Pradhan Gali, Basedi,
    District Dholpur (Raj.) Lease Holder of Mining Lease situated at
    District Dholpur.
                                                                          ----Petitioner
                                          Versus
    1.      State    of     Rajasthan,          through         Principal    Secretary,
            Department of Finance, Secretariat, Jaipur.
    2.      Commissioner, State Goods and Service Tax, Kar Bhawan,
            Ambedkar Circle, Jaipur.
    3.      Assistant Commissioner, Ward No. II, Headquarter Badi,
            Circle Dholpur-Bharatpur, Rajasthan.
                                                                       ----Respondents

For Petitioner : Mr. R.C. Agarwal Advocate with Mr. Amit Jindal Advocate.

For Respondents : Mr. Umang Gupta Advocate with Ms. Shivalika Srivastava Advocate.

HON'BLE THE CHIEF JUSTICE MR. MANINDRA MOHAN SHRIVASTAVA HON'BLE MR. JUSTICE BHUWAN GOYAL

Order

04/04/2024

1. By this writ petition, the petitioner has called in question the

correctness and validity of show cause notice dated 29.10.2022

issued by Respondent No. 3 under Section 74 of the Rajasthan

Goods and Services Tax Act, 2017 (hereinafter referred to as 'the

RGST Act, 2017')/the Central Goods and Services Tax Act, 2017

(hereinafter referred to as 'the CGST Act, 2017') for financial year

2018-19 as also order dated 13.03.2023 passed by Respondent

No. 3 by which the petitioner has been directed to deposit the

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amount of Rs. 4,51,356/- towards service tax on royalty, interest

and penalty.

2. Though number of grounds have been urged in the writ

petition as also before this Court to assail the correctness and

validity of aforesaid show cause notice as also order dated

13.03.2023, learned counsel for the respondents, appearing on

advance copy, brought to the notice of the Court that after the

proceedings under Section 74 of the RGST Act, 2017/ the CGST

Act, 2017 were drawn against the petitioner which culminated in

order dated 13.03.2023 resulting in levy of tax liability along with

interest and penalty, the petitioner did not file any appeal either

within the period of limitation as prescribed under Section 107 of

the RGST Act, 2017/ the CGST Act, 2017 or within the maximum

period thereafter which could be condoned under the power to

condone the delay in filing of the appeal. Therefore, in view of the

decision of the Hon'ble Supreme Court in the case of Assistant

Commissioner (CT) LTU, Kakinada & Ors. vs. Glaxo Smith

Kline Consumer Health Care Limited, (2020) 19 SCC 681,

present writ petition is not maintainable and liable to be

dismissed.

3. 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

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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.

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4. 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

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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."

5. 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."

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6. Present is a case where the petitioner did not even file

appeal and allowed the order passed in assessment proceedings to

become final and thereafter approached this Court by filing writ

petition seeking to challenge the determination of tax, interest and

penalty by the competent authority vide order dated 13.03.2023.

Present is not a case where the order under Section 74 of the

RGST Act, 2017/ the CGST Act, 2017 levying tax along with

interest and penalty was passed without giving any opportunity of

hearing to the petitioner. Even according to the petitioner, he was

issued show cause notice and thereafter, impugned order was

passed. In the writ petition, no plausible explanation has been