Hotel Athithi vs. The Union Of INDIA And 2 Ors

Facts

The appellant, Hotel Athithi (Unit of Royal Mission Construction Pvt Ltd), is challenging an order dated 28.02.2024 passed by the Assistant Commissioner of GST and Central Excise. This order confirmed a demand for Service Tax, along with interest and penalty. The appellant had initially received a show cause notice on 22.10.2021 and filed a reply on 27.03.2023, followed by a hearing on 29.03.2023. Subsequently, a new adjudicating authority issued another notice with a hearing date of 17.01.2024. The appellant admits to receiving this notice but failed to appear on the scheduled date, leading to the impugned order. The appellant's writ petition before the learned Single Judge was dismissed.

Held

The Court held that the case of the appellant was not one of failure of natural justice that would warrant invoking the extraordinary jurisdiction under Article 226 of the Constitution. The learned Single Judge had correctly opined that the appellant had an alternative and efficacious remedy available under the Finance Act, 1994, by way of an appeal against the impugned order dated 28.02.2024. The Court found no reason to interfere with the Single Judge's decision. The ratio decidendi is that statutory remedies must generally be exhausted before approaching the High Court under Article 226, especially when the alleged procedural infirmity does not amount to a complete denial of natural justice. The Court affirmed the Single Judge's direction to relax the limitation period for filing the appeal.

Key Issues

1. Whether the appellant was denied natural justice, necessitating invocation of the writ jurisdiction under Article 226 of the Constitution of India? The petitioner argued that the change in adjudicating authority and the subsequent notice, despite their failure to appear on 17.01.2024, constituted a denial of natural justice. The respondent (Revenue) contended that the appellant had a statutory remedy of appeal under the Finance Act, 1994, and therefore, the writ petition was not maintainable. The respondent also argued that the appellant's failure to appear on the given date was not due to any fault of the authority but their own omission. 2. Whether the learned Single Judge erred in dismissing the writ petition and directing the appellant to avail the statutory remedy of appeal? The petitioner argued that the Single Judge should have entertained the writ petition due to the alleged violation of natural justice. The respondent maintained that the Single Judge correctly exercised discretion by directing the appellant to the appellate forum.