HC Denies Relief on Rs. 77.8 Cr GST Mismatch: Asks Taxpayer to Exercise Alternative Remedy

The High Court has refused to provide relief to the taxpayer in a matter where Rs. 77,88,28,755.17/- was held as evaded turnover due to mismatches noticed in GST returns during the scrutiny of returns for the year 2017-18.

Facts of the Case

The petitioner was issued notice under Section 61 of the Uttar Pradesh Goods and Services Tax Act, 2017 (‘the Act’) regarding discrepancies noticed on scrutiny of returns for the year 2017-18 on 19.04.2023.

A response was filed by the petitioner on 25.05.2023, which was not found satisfactory, and as such, a notice under Section 73 of the Act was issued in relation to two issues:

(i) Difference in relation to duty credit scrip in GSTR-1 and GSTR-3B, and

(ii) Amount of Rs. 77,88,28,755.17/- reflected in Column 5O in GSTR-9C pertaining to adjustments in turnover due to reasons not listed above.

It was found that the claim made based on high sea sale and high sea purchase were not reflected in the monthly returns or annual returns, based on which, a notice under Section 74 of the Act was issued to the petitioner.

A response was filed, and after providing the opportunity for a hearing, the response/clarification submitted by the petitioner was not accepted, and the order impugned dated 05.02.2025 was passed, indicating Rs. 77,88,28,755.17/- as evaded turnover and ordering for payment of tax, penalty and interest.

Analysis of High Court:

Several pleas have been raised in the writ petition, seeking to contest the conclusion arrived at by the Assessing Authority. All the pleas, which are sought to be raised, pertain to the merit of the order passed and essentially, seek this Court to act as an Appellate Authority qua the order impugned with reference to the material, which was placed before the Authority and has been made part of the record of the present petition. Pleas pertaining to violation of the principle of natural justice and lack of jurisdiction have been raised, however, the said pleas only remain in words and have not at all been substantiated.

The order impugned, admittedly, is appealable, however, except for indicating that the petitioner has no option but to approach this Court for exercise of constitutional right to carry on trade and business as per the law and for quashing of tax and penalty, not a word has been indicated for bypassing the alternative remedy available to the petitioner of filing appeal.

The parameters for exercising jurisdiction under Article 226 of the Constitution of India are well settled, wherein it can be exercised sparingly and only in exceptional circumstances despite availability of statutory remedy. Recently, Hon’ble Supreme Court in Jaipur Vidyut Vitran Nigam Limited vs. MB Power (MP) Limited : (2024) 8 SCC 513, after referring to the judgement in Radha Krishan Industries vs. State of H.P. : (2021) 6 SCC 771, has laid down that though availability of an alternative remedy is not a complete bar in the exercise of power of judicial review by the High Courts, the recourse to such a remedy would be permissible only if extraordinary and exceptional circumstances are made out. It was observed that when a right is created by a 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.

Petitioner has failed to point out any extraordinary circumstance for bypassing the statutory alternative remedy

In the present case, the petitioner has failed to point out any extraordinary and exceptional circumstance for bypassing the statutory alternative remedy. Neither there has been a failure of principles of natural justice nor it is the case of the petitioner that proceedings were without jurisdiction, which are the grounds under which the bar of statutory remedy does not come in the way of entertaining the petitions under Article 226 of the Constitution of India.

Final Order:

In view of above discussion, we do not find any reason to invoke our extraordinary jurisdiction in the present case. The petition is, therefore, dismissed, leaving it open for the petitioner to avail alternative remedy in accordance with law.