2024 (12) TMI 1185 - HC - GST

Maintainability of petition - availability of efficacious alternative remedy - Freezing of petitioner's bank account - violation of principles of natural justice - HELD THAT - The arguments about the orders suffering from vice of want of jurisdiction or the orders being contrary to the decisions in MDS Switchgear Ltd 2008 (8) TMI 37 - SUPREME COURT and Nestle India Ltd. 2004 (5) TMI 65 - SUPREME COURT can always be raised in an appeal. Based on such general and vague averments, the remedies provided under the statute cannot be so lightly bypassed. In the case of Oberoi Constructions Ltd Vs. The Union of India 2024 (11) TMI 588 - BOMBAY HIGH COURT this Court has considered several precedents about the exhaustion of alternate remedies. This Court has also taken note of the increased tendency to bypass the statutory remedies and insist upon instituting Petition under Articles 226 and 227 of the Constitution of India. Paragraph 65 quoted above does not even indicate any financial difficulties for payment of the pre-deposit amount - Therefore, freezing this bank account will not affect the Petitioner s ability to institute an appeal by making a pre-deposit. By adopting the reasoning in the said decision, no case is made to interfere with the impugned order. Upon an exhaustive analysis of precedents on the subject, including the precedent in Greatship (India) Limited 2022 (9) TMI 896 - SUPREME COURT and others, the coordinate Bench declined to entertain the Writ Petition inter alia on the ground that statutory appellate remedies were available and factual inquiry was necessary to determine whether the jurisdictional facts were established, or not. The coordinate Bench noted that even the Supreme Court had disapproved the High Court s entertaining Writ Petitions involving classification disputes or even the applicability of exemption notification when parties had statutory alternate remedies. This Petition cannot be entertained, even though some artificial urgency sought to be created, and relegate the Petitioner to the alternate remedy of appeal, should the Petitioner choose to institute such appeal before the Appellate Authority - petition dismissed.

Summary

Issues:
1. Petitioner's bank account frozen due to five orders-in-original demanding ITC, interest, and penalty.
2. Petitioner's rush to High Court alleging breach of natural justice and seeking to bypass alternate remedy of appeal.
3. Argument on jurisdiction, violation of natural justice, and bypassing statutory remedies.
4. Precedents on exhaustion of alternate remedies and the purpose of Article 226 of the Constitution.
5. Court's observation on the misuse of Article 226 petitions for obtaining interim orders.

Analysis:

The judgment by the High Court of Bombay dealt with the freezing of the Petitioner's bank account following five orders-in-original demanding ITC, interest, and penalty. The Petitioner rushed to the High Court, alleging a breach of natural justice and seeking to bypass the alternate remedy of appeal. The Court noted that the Petitioner had an efficacious remedy available under the statute to appeal the orders but chose to approach the Court instead, citing a violation of natural justice without reference to it in the initial petition.

The Court emphasized that arguments regarding jurisdiction and contrariness to previous judgments could be raised in an appeal, and the statutory remedies should not be lightly bypassed based on general averments. Referring to precedents, the Court highlighted the increased tendency to bypass statutory remedies and the need to exhaust alternate remedies before approaching the Court under Article 226 of the Constitution. The Court cited the importance of good and sufficient reasons to bypass statutory procedures, especially in matters involving revenue where statutory remedies are available.

Furthermore, the judgment referred to previous cases where the Court declined to entertain writ petitions, relegating the petitioners to the alternate remedy before the Appellate Tribunal. The Court noted that factual inquiries were necessary to establish jurisdictional facts and that even the Supreme Court disapproved of entertaining writ petitions in matters where statutory alternate remedies were available. Consequently, the Court declined to entertain the Petition, reiterating the importance of exhausting statutory remedies before seeking relief under Article 226.

In conclusion, the Court dismissed the Petition, granting liberty to the Petitioner to file appeals within six weeks and directing the Appellate Authority to consider and dispose of such appeals on merits without referring to the limitation issue. The judgment highlighted the misuse of Article 226 petitions for obtaining interim orders and prolonged proceedings, emphasizing the need to discourage such practices. Despite being a fit case for costs, the Court refrained from imposing costs at the persuasion of the Petitioner's counsel.