2025 (1) TMI 713 - HC - GST

Maintainability of petition - availability of statutory alternative remedy under section 107 of the (Central Goods and Service Tax) CGST Act, 2017 - HELD THAT - The Apex court in the case of HINDUSTAN COCA COLA BEVERAGE (P) LTD. VERSUS UNION OF INDIA AND OTHERS 2014 (9) TMI 585 - SUPREME COURT has held that when a statute provides for statutory appeal, the said remedy is to be availed by the litigating parties. The Apex court in the case of ANSAL HOUSING AND CONSTRUCTION LTD. VERSUS STATE OF U.P. AND ORS. 2016 (3) TMI 1435 - SUPREME COURT , has held that when statutory appeal is provided then the said remedy has to be availed. In the case of M/S GODREJ SARA LEE LTD. VERSUS THE EXCISE AND TAXATION OFFICERCUM- ASSESSING AUTHORITY ORS. 2023 (2) TMI 64 - SUPREME COURT , the Apex Court has held that High Court can only interfere in the matters when disputed question of law are involved and not in the question of facts. In the present case, no disputed question of law is involved. Conclusion - The writ petitions cannot be entertained, when a statutory remedy is available unless exceptional circumstances are demonstrated. The principles of natural justice do not automatically require a personal hearing if procedural fairness is otherwise observed. Petition disposed off.

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

Whether the High Court should entertain a writ petition under Article 226 of the Constitution of India when a statutory alternative remedy is available under Section 107 of the Central Goods and Services Tax (CGST) Act, 2017.
Whether the lack of a personal hearing in the adjudication process constitutes a violation of the principles of natural justice, justifying the invocation of writ jurisdiction.
Whether there are any exceptional circumstances that would permit the High Court to bypass the statutory remedy and entertain the writ petition directly.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Availability of Statutory Alternative Remedy

Relevant legal framework and precedents: The CGST Act, 2017, provides a statutory remedy under Section 107 for appeals against orders passed under the Act. The Supreme Court has consistently held that when a statutory remedy is available, it should be availed before approaching the High Court under Article 226, as seen in cases like Hindustan Coca Cola Beverage Private Limited and Ansal Housing and Construction Ltd.
Court's interpretation and reasoning: The court emphasized that the existence of a statutory remedy is not an absolute bar to filing a writ petition but should be availed unless exceptional circumstances exist.
Key evidence and findings: The court noted that the petitioner had not availed the statutory remedy of appeal under Section 107 of the CGST Act, 2017.
Application of law to facts: The court found that the petitioner did not demonstrate any exceptional circumstances that would justify bypassing the statutory remedy.
Treatment of competing arguments: The petitioner argued that the writ petition was justified due to the absence of a personal hearing. However, the court referred to precedents emphasizing the need to exhaust statutory remedies first.
Conclusions: The court concluded that the petitioner should pursue the available statutory remedy and dismissed the writ petition.

Issue 2: Violation of Principles of Natural Justice

Relevant legal framework and precedents: The principles of natural justice require a fair hearing before an adverse decision is made. The Supreme Court in Godrej Sara Lee Ltd. emphasized that High Courts should not interfere in matters involving factual disputes unless there is a clear breach of natural justice.
Court's interpretation and reasoning: The court found no violation of natural justice as the petitioner was served notice and had the opportunity to respond, even if a personal hearing was not granted.
Key evidence and findings: The court noted that the petitioner had been notified and had submitted responses to the show cause notice.
Application of law to facts: The court determined that the absence of a personal hearing did not constitute a breach of natural justice in this case.
Treatment of competing arguments: The petitioner relied on the lack of a personal hearing to claim a breach of natural justice. The court, however, found that sufficient procedural fairness was observed.
Conclusions: The court concluded that there was no breach of natural justice that would warrant High Court intervention.

Issue 3: Exceptional Circumstances for Writ Jurisdiction

Relevant legal framework and precedents: The Supreme Court in The Assistant Commissioner of State Tax vs. M/s Commercial Steel Limited outlined exceptions where writ jurisdiction could be invoked despite available statutory remedies, such as breaches of fundamental rights or excess of jurisdiction.
Court's interpretation and reasoning: The court found that none of the exceptions applied to the petitioner's case.
Key evidence and findings: The court observed that the petitioner did not establish any exceptional circumstances, such as a breach of fundamental rights or jurisdictional issues.
Application of law to facts: The court applied the established legal principles and found no basis to entertain the writ petition.
Treatment of competing arguments: The petitioner did not successfully argue any of the exceptional circumstances that would justify the High Court's intervention.
Conclusions: The court concluded that the writ petition was not maintainable due to the lack of exceptional circumstances.

3. SIGNIFICANT HOLDINGS

Preserve verbatim quotes of crucial legal reasoning: "The existence of an alternate remedy is not an absolute bar to the maintainability of a writ petition under Article 226 of the Constitution. But a writ petition can be entertained in exceptional circumstances where there is: (i) a breach of fundamental rights; (ii) a violation of the principles of natural justice; (iii) an excess of jurisdiction; or (iv) a challenge to the vires of the statute or delegated legislation."
Core principles established: The High Court should not entertain writ petitions when a statutory remedy is available unless exceptional circumstances are demonstrated. The principles of natural justice do not automatically require a personal hearing if procedural fairness is otherwise observed.
Final determinations on each issue: The court dismissed the writ petition, directing the petitioner to avail the statutory remedy of appeal under Section 107 of the CGST Act, 2017. The court found no breach of natural justice or exceptional circumstances to justify bypassing the statutory remedy.

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