J&K HC Directs Assessee to Pursue Statutory GST Appellate Remedy

The Jammu & Kashmir and Ladakh High Court recently dismissed a writ petition challenging GST demand proceedings on the ground of availability of an alternative statutory remedy under Section 107 of the CGST Act. A Division Bench comprising Justice Sanjeev Kumar and Justice Wasim Sadiq Nargal held that the petitioner had failed to establish violation of principles of natural justice or lack of jurisdiction so as to bypass the appellate remedy available under the statute. The Court pointed out that

The Court observed that “where a right or liability is created by a statute which itself prescribes the remedy or procedure for enforcing such right or liability, resort must be had to that particular statutory remedy before invoking the discretionary remedy under Article 226 of the Constitution.”

The petitioner, M/s Ess Ess Enterprises and Electronics, challenged a show cause notice dated 06.02.2026, reminder dated 11.03.2026 and demand order dated 09.04.2026 issued by the State Taxes Officer under Section 73 of the J&K GST Act for the financial year 2022-23. A tax demand of Rs. 3.41 crore towards tax, interest and penalty was raised against the petitioner.

Before the High Court, the petitioner contended that principles of natural justice were violated as the proprietor was out of station and could not attend the personal hearing initially fixed on 08.03.2026. It was further argued that the subsequent hearing date, i.e., 21.03.2026, fell on Eid-ul-Fitr, which was a public holiday. The petitioner also argued that once audit proceedings under Section 65 of the CGST Act had already been conducted and discrepancies were addressed, the State Taxes Officer lacked jurisdiction to initiate separate proceedings under Section 73.

The High Court, however, rejected the submissions and noted that sufficient opportunity had been granted to the petitioner to file reply and participate in the proceedings. The Court observed that the petitioner was initially granted 30 days to respond to the show cause notice and was later given additional time till 21.03.2026 through the reminder notice.

The Bench further held that nothing prevented the petitioner from at least filing a reply within the extended period and therefore “cannot be said to have been denied the opportunity of hearing.”

On the jurisdictional challenge, the Court referred to Section 65(7) of the CGST Act and held that where audit detects short payment or non-payment of tax, the proper officer is empowered to initiate proceedings under Sections 73 or 74 of the Act. The Bench clarified that completion of audit proceedings does not bar initiation of adjudication proceedings by the proper officer.

Thus, the Court held that the petitioner failed to bring the case within any recognized exception to the rule of alternative remedy and dismissed the writ petition as not maintainable, while granting liberty to avail the statutory appellate remedy under Section 107 of the CGST Act/J&K GST Act.

To Read Full Order, Download PDF Given Below.