Bombay HC Advises Assessee to Pursue Alternate Remedies Before Quashing GST Demand SCN

Multiple petitions are been faced by the Bombay High Court related to the quashing of demand notices issued under the Goods and Services Tax (GST) Acts, submitted by separate entities engaged in the construction business. The HC suggested the applicants first approach all other remedies available to them to challenge their matter before approaching the HC for relief.

The Writ Petition filed by Oberoi Constructions Ltd. against the Revenue and its subsidiaries is been regarded by the HC of Bombay as the leading matter for the joint adjudication of the entailing matters. All of the applicants asked to contest the demands or Show cause notice furnished via the Revenue against the Petitioners under the provisions of the Central Goods and Services Tax Act, 2017 (CGST Act), Integrated Goods and Services Tax Act, 2017 (IGST Act) and Maharashtra Goods and Services Tax Act, 2017 (MGST Act).

Senior Advocate V. Sridharan, appearing for Oberoi Constructions directed Notification No.12/2017 – Central Tax (Rate) on 28.06.2017 to present that nil rate of tax is charged on services by Central Government, State Government, Union Territories, Local Authorities, or Governmental Authorities through the way of any activity in connection to any function entrusted to the Municipality under Article 243W of the Constitution of India.

The Counsel laid on the matters of East India Commercial Co. Ltd. Calcutta V/s. Collector of Customs, Calcutta, and State of UP and Ors. V/s. Indian Hume Pipe Co. Ltd. among others argues that there is no constitutional or statutory rule mandating the exhaustion of alternative remedies and that such a decision is self-imposed. Additionally, it was averred that the Show-Cause Notices had been furnished via the Revenue without jurisdiction, praying that the applicants not be downgraded to alternative remedies.

The Division Bench of the Bombay High Court comprising Justice M.S. Sonak & Justice Jitendra Jain marked that whether tax demands purported against the applicants concern any activity for the operations of the Municipality under Article 243W might merely be determinable via the proper adjudicatory process and not via the HC practising the extraordinary and summary jurisdiction under Article 226 of the Constitution since it may need an examination of factual aspects that cannot be conveniently undertaken by the High Court at this phase.

Directing to Viswaat Chemicals Ltd. and Anr. V/s. Union of India and Ors (2024) and Dow Chemical International Pvt. Ltd. V/s. Commissioner of Customs NS-II Special Investigation and Intelligence Branch (X) and Anr (2024) the Bench enunciated that no case had been made by the Petitioners to allow the bypass of statutory alternate remedies and entertainment of the cases through the High Court.

Considering the observations made, the Bombay High Court disposed of the case but granted rights to the applicants to claim another remedy and 6 months to provide the answer to the impugned SCN.