2024 (6) TMI 954 - HC - GST

Maintainability of petiton - alternative remedy u/s 30 of GST Act to file an application - Cancellation of GST registration of the petitioner - violation of principles of natural justice and violative of Articles 19 and 21 of the Constitution of India - HELD THAT - Hon ble Apex Court in WHIRLPOOL CORPORATION VERSUS REGISTRAR OF TRADE MARKS, MUMBAI ORS. 1998 (10) TMI 510 - SUPREME COURT held that in certain contingencies viz., when writ petition is filed for enforcement of fundamental rights, or where there has been a violation of principles of natural justice or when the proceedings impugned are wholly without jurisdiction or the vires of an act is challenged, the writ petition could be maintainable in spite of availability of alternative remedy. In the instant case the petitioner banks upon the violation of principles of natural justice to maintain the writ petition. In this context, a perusal of the show cause notice dated 22.06.2023 shows that the 1st respondent has given required particulars of the non-existent tax payers from whom the petitioner allegedly obtained bogus tax invoices. Admittedly, the petitioner has alternative remedy to challenge the impugned order which he did not avail. Therefore, no order deserved in the writ petition. However, considering that the petitioner s registration has been cancelled and thereby he cannot continue his business activities, it is deemed apposite to give an opportunity to the petitioner to challenge the impugned order either by way of filing a petition U/s 30 of the GST Act or to file an appeal within a reasonable time. Petition dismissed.

Summary

Issues:
The judgment deals with the cancellation of registration of the petitioner under CGST/APGST Act, 2017, and the violation of principles of natural justice and constitutional articles 19 and 21.

Issue 1: Cancellation of Registration
The petitioner, a business entity dealing in iron scrap, was registered under GSTIN No. 37DJTPS3181K1ZA. The 1st respondent issued a show cause notice proposing cancellation of registration based on alleged fraudulent activities by suppliers. The petitioner disputed the allegations, highlighting the lack of incriminating material provided and the violation of natural justice. Despite objections, the 1st respondent canceled the registration, prompting the petitioner to file a writ petition.

Issue 2: Violation of Natural Justice
The petitioner argued that the show cause notice did not provide essential details regarding the alleged fraudulent transactions, denying the opportunity to respond effectively. The petitioner contended that the impugned order was based on untenable grounds not raised in the notice, violating principles of natural justice. The Government Pleader argued that the writ petition was not maintainable due to alternative remedies available under the law.

Judgment:
The High Court considered the maintainability of the writ petition in light of the availability of alternative remedies under the GST Act. Referring to legal precedent, the Court noted that a writ petition can be entertained in cases of fundamental rights enforcement, violation of natural justice, lack of jurisdiction, or challenge to an act's validity. In this case, the show cause notice contained necessary particulars, and the petitioner had alternative avenues to challenge the impugned order. Therefore, the writ petition was dismissed. However, the petitioner was granted 15 days to avail of the alternative remedies, either by filing a petition under Section 30 of the GST Act or by appealing the order. The concerned authority was directed to decide on the matter after providing a hearing to both parties. No costs were awarded, and pending applications were closed as a result of the judgment.