Introduction:

In the case of Tara Lohia Private Limited v. Additional Commissioner, CGST & CX, Kolkata South Commissionerate & Anr. (WPA 9655 of 2025), the Calcutta High Court, presided over by Justice Raja Basu Chowdhury, examined whether a writ petition could be maintained against an officer’s finding on the availment of Input Tax Credit (ITC) under the CGST Act when the alleged error occurred within the officer’s jurisdiction. The petitioner, Tara Lohia Private Limited, challenged proceedings initiated under Section 74 of the CGST Act following audit observations under Section 65, contending that the department had wrongly concluded that payments to sundry creditors were not made within the statutory period of 180 days, thereby disallowing ITC under the second proviso to Section 16(2). The department defended its position by asserting that the petitioner failed to furnish adequate proof, such as bank statements, to establish timely payments. The Court, after considering the submissions, held that while a writ may be maintainable in cases involving a violation of natural justice or jurisdictional error, it would not lie merely for correcting an error committed within jurisdiction, and thus dismissed the petition.

Arguments of the Petitioner:

The petitioner argued that the departmental action was irregular and without basis, as the department wrongly assumed that the amounts shown as outstanding against sundry creditors in the balance sheet and profit and loss account represented payments pending for more than 180 days. The petitioner claimed that in reality, all such payments had been made within the statutory period, thereby entitling it to the ITC in question. It was submitted that the department failed to properly consider the petitioner’s explanation and evidence, and instead mechanically invoked the second proviso to Section 16(2) of the CGST Act. According to the petitioner, this amounted to an arbitrary approach in violation of principles of fairness and natural justice, especially when the petitioner had complied substantially with the order. The petitioner sought to set aside the findings of the proper officer, asserting that the decision was vitiated by factual errors and incorrect appreciation of records.

Arguments of the Respondent:

On behalf of the department, it was argued that the petitioner had not provided crucial documentary evidence—specifically bank statements—to prove that payments to sundry creditors were made within the prescribed 180-day limit. The respondents emphasized that without such verification, the petitioner’s claim of timely payments could not be accepted. It was further contended that the issue of irregular availment of ITC had already been considered by the proper officer, who had recorded a finding that in the absence of supporting documents, no relief could be granted. The department also pointed out that the petitioner had partially complied with the order, and thus, its challenge amounted to seeking a re-evaluation of facts already decided, which was impermissible in writ jurisdiction. They argued that the petitioner had alternative statutory remedies, and the writ petition was merely an attempt to reopen issues before the appellate authority in a second round of litigation.

Court’s Judgment:

Justice Raja Basu Chowdhury began by clarifying the legal principle that a writ petition under Article 226 of the Constitution is maintainable in cases of jurisdictional overreach or violation of principles of natural justice. However, such maintainability does not extend to cases where the authority, acting within its jurisdiction, commits an error of fact or law, unless the error results from a lack of jurisdiction. The Court noted that in the present case, the petitioner’s grievance essentially pertained to the alleged misappreciation of facts by the proper officer in concluding that payments were not made within the statutory period. This, the Court held, was an error (if any) committed within jurisdiction and not a case of jurisdictional excess or lack thereof. The Court observed that the petitioner had indeed failed to furnish adequate bank statements to substantiate its claim of timely payments, which was the crux of the officer’s finding.

The Court further held that the nature of the challenge sought by the petitioner was, in effect, an appeal disguised as a writ petition, aiming to secure a reappraisal of factual findings. Such an exercise, the Court emphasized, falls outside the scope of Article 226 when statutory remedies are available. Importantly, the Court remarked that the petitioner had partially complied with the order, which further undermined its challenge. It reiterated that no writ could be maintained to contest a decision simply because the petitioner believed the officer erred in evaluating evidence within his jurisdiction.

The Court concluded that allowing such a writ would effectively permit litigants to bypass the appellate process and have a “second round” of adjudication before the High Court, which is impermissible. As such, the petition was disposed of without granting relief to the petitioner. This ruling reinforces the principle that writ jurisdiction cannot be invoked as a substitute for an appeal or revision in tax disputes where the adjudicating authority has acted within its powers, even if the petitioner disagrees with the factual conclusions.