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2023 (2) TMI 1087 - HC - GSTMaintainability of petition - availability of alternative remedy of appeal - Validity of SCN - SCN challenged on the ground that the same is without jurisdiction, arbitrary and illegal - HELD THAT - In the case of Malladi Drugs and Pharma Limited 2004 (3) TMI 67 - SC ORDER , the Apex Court has found that the appellant was a bulk drug manufacturer and used platinum catalyst. A show cause notice was issued as to why not to pay the duty. The reply was filed to the said show cause notice and then the writ petition was preferred. On the ground that the High Court s order was passed way back in the year 1997, neither party knew whether the department had proceeded further and whether any order had been passed pursuant to the show cause notice. The Court held that the High Court was right in dismissing the writ petition against a mere show cause notice. Thus, mere ground of alternative remedy being available will not be the reason for this Court to not entertain this petition. Issue raised will also require consideration and the decision of Malladi Drugs and Pharma Limited makes it quite clear that the aspect of non-maintainability is on account of self-imposed limitations and the restraints on exercise of powers to issue a writ. The entertainability and maintainability of the writ being a distinct aspect, this Court issues the Rule.
Issues Involved:
1. Jurisdiction of the show cause notice under Section 74 of the GST Act. 2. Whether the road restoration work by AMC constitutes a taxable supply under GST. 3. Availability of alternative remedy and maintainability of the writ petition. Issue-wise Detailed Analysis: 1. Jurisdiction of the Show Cause Notice under Section 74 of the GST Act: The petitioner challenged the show cause notice dated 30.11.2022 issued under Section 74 of the GST Act, claiming it was without jurisdiction, arbitrary, and illegal. The petitioner, engaged in the business of electricity transmission and distribution, argued that the road reinstatement charges paid to AMC were not subject to GST as the AMC's restoration work was part of its sovereign function under Article 243W of the Constitution of India. The petitioner contended that there was no element of supply involved in the transaction, and thus, no GST was applicable. 2. Whether the Road Restoration Work by AMC Constitutes a Taxable Supply under GST: The respondent argued that the petitioner was liable to pay GST on a reverse charge basis for the road restoration services provided by AMC. According to the respondent, the road restoration work was not part of AMC's sovereign function and thus did not qualify for exemption under Entry 4 of Notification No.12/2017 of the Central Tax (Rate) dated 28.06.2017. The respondent emphasized that the petitioner, as a recipient of services, should pay GST on the road restoration charges. The petitioner countered this by stating that the road restoration work was a statutory obligation of AMC and not a service requested by the petitioner. 3. Availability of Alternative Remedy and Maintainability of the Writ Petition: The respondent argued that the petitioner should exhaust alternative legal remedies before approaching the High Court. They cited several decisions, including the case of Malladi Drugs and Pharma Limited vs. Union of India, where the Supreme Court held that the availability of an alternative remedy does not bar the maintainability of a writ petition. The Court noted that while the writ jurisdiction should not be invoked routinely when an alternative remedy exists, the High Courts have discretion to entertain writ petitions based on the facts of each case. The Court decided to issue the Rule, acknowledging that the issue raised required consideration and that the mere availability of an alternative remedy would not preclude the Court from entertaining the petition. Conclusion: The Court recognized the distinct concepts of "entertainability" and "maintainability" of a writ petition, emphasizing that the availability of an alternative remedy does not automatically render a writ petition non-maintainable. The Court issued the Rule but did not grant an interim stay on the proceedings pursuant to the impugned show cause notice. The petitioner was advised to approach the Court if any adjudication affected its rights.
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