M/S Rezaul Islam vs. The State Of Assam And 3 Ors.

Held

The Court held that ordinarily, in revenue matters, a writ petition under Article 226 is not entertained when an adequate and efficacious statutory remedy is available. The Court noted that Section 107 of the CGST/AGST Act, 2017, provides a statutory remedy of appeal against the impugned order. While the petitioner raised concerns about the lack of personal hearing, the Court found that the primary issue was the availability of an alternative remedy. However, considering the petitioner's submission regarding the frozen bank account and the difficulty in making the pre-deposit required under Section 107(6)(b), the Court, by analogy with a previous order in WP(C) No. 4694/2024, provided specific directions. The Appellate Authority was directed to permit the petitioner to file an appeal and entertain it without insisting on the pre-deposit, subject to the condition that the frozen bank account contains an amount equivalent to or more than the pre-deposit. If the amount in the frozen account is insufficient, the petitioner is permitted to deposit the balance amount. The Court also observed that if the freeze is removed during appeal proceedings, the petitioner must deposit the pre-deposit amount for the appeal to continue. The writ petition was disposed of with these observations and directions.

Facts

The petitioner, M/s Rezaul Islam, a proprietorship firm dealing in coal, challenged an Order-in-Original dated 16.08.2024 and a Summary of Order dated 16.08.2024 passed by the Assistant Commissioner of State Tax, Circle-3, Dhubri Unit, under Section 74 of the CGST/AGST Act, 2017, for the period April, 2022 – March, 2023. The impugned order demanded Rs. 1,06,59,000/- as tax, interest, and penalty. The petitioner's bank account had been frozen on 05.04.2024. The petitioner contended that the order was passed without affording an opportunity of personal hearing. The revenue argued that an alternative statutory remedy under Section 107 of the CGST/AGST Act, 2017, was available and should be availed.

Key Issues

1. Whether a writ petition under Article 226 of the Constitution of India is maintainable when an alternative statutory remedy under Section 107 of the CGST/AGST Act, 2017, is available to the petitioner? (Question of law) 2. Whether the petitioner was denied an adequate opportunity of hearing before the passing of the impugned Order-in-Original, thereby violating principles of natural justice? (Question of mixed law and fact) Petitioner's Arguments: The petitioner argued that the Order-in-Original was passed without providing any opportunity of personal hearing, thus violating principles of natural justice. The petitioner also highlighted that its bank account has been frozen since 05.04.2024, making it difficult to comply with the pre-deposit requirement for an appeal. Revenue's Arguments: The revenue contended that a writ petition is not ordinarily maintainable when an adequate, efficacious, and statutory remedy under Section 107 of the CGST/AGST Act, 2017, is available. It was argued that the petitioner failed to make out an exceptional case. The revenue further submitted that the petitioner did not approach the adjudicating authority to submit a reply or seek further time, and therefore, it was not a case of denial of an opportunity of being heard. The revenue also stated that sufficient time had elapsed after the show cause notice before the impugned order was passed.