Rajasthan HC Declines to Interfere with ₹5.45 Crore GST Demand Citing Alternative Appellate Remedy [Read Order]

In a recent ruling, the Rajasthan High Court declined to interfere with a GST demand of ₹5.45 crore, holding that the writ petitions were not maintainable due to availability of an alternative statutory appellate remedy under the GST law.

The matter arose from a show cause notice dated 30 May 2024 issued under Section 74 of the Rajasthan GST Act, followed by a reminder dated 6 August 2024. The Ishwar Singh and Associates Construction Private Limited (assessee) GST registration had already been cancelled with effect from 30 April 2023.

The notices and the ex parte adjudication order along with Form GST DRC-07 were uploaded on the GST portal. The adjudication resulted in a demand of Rs. 5,45,51,196 towards tax, interest and penalty.

The assessee’ s counsel approached the High Court arguing that the order was passed in violation of principles of natural justice and Sections 169 and 75(4) of the GST Act. They argued that the notices were not properly communicated and no personal hearing was granted before passing the ex parte order.

The State’s counsel opposed the petitions and argued that an effective alternative remedy of appeal under Section 107 of the GST Act was available. They also argued that service through the GST portal is a recognised statutory mode and cancellation of registration does not wipe out past tax liabilities.

The Division Bench comprising Dr. Justice Pushpendra Singh Bhati and Justice Sangeeta Sharma observed that the appellate authority under Section 107 is empowered to examine issues relating to service of notice and denial of hearing. The court explained that writ jurisdiction should not be exercised when a statutory remedy is available.

On this basis, the writ petitions were dismissed with liberty to avail the appellate remedy, and all pending applications were disposed of.

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