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2025 (4) TMI 501 - HC - GSTMaintainability of writ petition under Article 226 of the Constitution of India - availability of an alternative statutory remedy under Section 107 of the Central Goods and Services Tax Act 2017 (CGST Act) - challenge to demand order - demand order came to the knowledge of the petitioner pursuant to the issuance of recovery notice - HELD THAT - Having regard to the distinct concepts of maintainability and entertainability there is no doubt that the instant writ petition is maintainable under Article 226 of the Constitution of India. The issue herein is thus whether this writ petition should be entertained or not in the backdrop of the obtaining fact situation. While it can be said that this Court has recognized some exceptions to the rule of alternative remedy i.e. where the statutory authority has not acted in accordance with the provisions of the enactment in question or in defiance of the fundamental principles of judicial procedure or has resorted to invoking the provisions which are repealed or when an order has been passed in total violation of the principles of natural justice the proposition laid down in Thansingh Nathmal and Titaghur Paper Mills case and other similar judgments that the High Court will not entertain a petition under Article 226 of the Constitution of India if an effective alternative remedy is available to the aggrieved person or the statute under which the action complained of has been taken itself contains a mechanism for redressal of grievance still holds the field. Therefore when a statutory forum is created by law for the redressal of grievances a writ petition should not be entertained ignoring the statutory dispensation. This Court is of the unhesitant view that the petitioner has not been able to make out any exceptional case to interfere with the impugned order in the extra-ordinary and discretionary jurisdiction under Article 226 of the Constitution of India. In such view of the matter this Court has found that the instant writ petition is not to be entertained. It is accordingly held. Conclusion - The writ petition is maintainable under Article 226 of the Constitution of India but should not be entertained due to the availability of an adequate alternative remedy under Section 107 of the CGST Act. The writ petition dismissed allowing the petitioner to pursue the statutory appellate remedy.
ISSUES PRESENTED and CONSIDERED
The primary legal questions considered in this judgment are:
ISSUE-WISE DETAILED ANALYSIS 1. Maintainability and Entertainability of the Writ Petition The legal framework under consideration is Article 226 of the Constitution of India, which provides for the issuance of writs by High Courts. The CGST Act, 2017, particularly Section 107, provides an appellate mechanism for challenging orders. The Court examined whether the availability of an alternative remedy under Section 107 bars the maintainability of the writ petition. The Court distinguished between 'maintainability' and 'entertainability,' noting that while the availability of an alternative remedy does not make a writ petition 'not maintainable,' it affects the discretion of the court to 'entertain' the petition. The Court cited precedents, including the Supreme Court's observations in "M/s Godrej Sara Lee Ltd. vs. The Excise and Taxation Officer-cum-Assessing Authority," emphasizing that the High Court's discretion is guided by whether an exceptional case has been made out for bypassing the alternative remedy. The Court concluded that the writ petition is maintainable but should not be entertained in this instance due to the existence of an adequate alternative remedy under Section 107 of the CGST Act, unless an exceptional case is demonstrated. 2. Violation of Principles of Natural Justice The petitioner argued that the demand order was issued without a show cause notice and personal hearing, violating principles of natural justice. The Court referenced the statutory provisions under Section 73 of the CGST Act, which outline the procedural requirements for issuing demand orders, including the service of notice and the opportunity for a hearing. The Court noted that the principles of natural justice require that a party be given a fair opportunity to present their case. However, the Court found that the petitioner had not demonstrated a breach of these principles that would justify the High Court's intervention under its extraordinary jurisdiction. 3. Validity of Service via Email The petitioner contended that the service of the show cause notice via email was not a prescribed mode under the CGST Act. The Court examined the statutory prescriptions for service under Section 73 of the CGST Act, which allow for various modes of service, including electronic means. The Court found that service via email is a statutorily permissible mode of service, and thus, the service of the notice in this manner did not constitute a violation of the statutory provisions. 4. Re-opening of Assessment and Dropping of Demands The petitioner argued that the re-opening of the assessment and subsequent dropping of demands by Respondent No. 3 should lead to the withdrawal of the impugned order. The Court considered whether these subsequent actions affected the validity of the original order. The Court concluded that the re-opening of the assessment and the actions taken thereafter do not automatically invalidate the original demand order. The petitioner still has the option to pursue the statutory appellate remedy to address these issues. SIGNIFICANT HOLDINGS The Court held that the writ petition is maintainable under Article 226 of the Constitution of India but should not be entertained due to the availability of an adequate alternative remedy under Section 107 of the CGST Act. The Court emphasized that while the High Court has wide discretionary powers, it should exercise restraint when an effective statutory remedy exists. Key principles established include the distinction between 'maintainability' and 'entertainability' of writ petitions, and the conditions under which a High Court may choose to exercise its extraordinary jurisdiction despite the availability of alternative remedies. The Court dismissed the writ petition, allowing the petitioner to pursue the statutory appellate remedy, and directed that the time spent in pursuing the writ petition be considered when addressing any issues of limitation in the appellate process.
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