M/S Nirmiti Kendra vs. State Of Karnataka

Learned counsel for the petitioner contended that the petitioner has sought for exemption from payment of tax. The same was rejected by respondent No.3 by passing the impugned order. The same is not a speaking order and therefore, there is violation of principles of natural justice. Moreover, respondent No.3 had no juri iction to pass the impugned order and therefore the petitioner is before this Court.

Learned counsel for the petitioner has placed reliance on the decision of the Hon’ble Apex Court in Whirlpool NC: 2024:KHC-D:6698 others1 in support of his contention that, when there is violation of principles of natural justice and when the order is passed without juri iction, this Court can exercise the writ juri iction to quash the order, irrespective of the fact as to whether there is an alternative and efficacious remedy is available to the petitioner. Accordingly, he prays for allowing the writ petition.

Per contra, learned High Court Government Pleader opposing the petition submitted that, the petitioner is seeking exemption from payment of tax wrongly. The petitioner is the Nirmiti Kendra established under the statute and therefore it cannot be termed as a Government and it is not liable for tax exemption. A show cause notice was issued to the petitioner and after taking in to consideration the reply submitted by the petitioner, the impugned order was came to be passed. The impugned order is a speaking order, where the contention of the petitioner is discussed at length and the reasons are assigned. Under such circumstances, there is no violation of principles of natural justice. Moreover, respondent No.3 is the authority to pass the order and therefore it cannot be said that 1 AIR 1999 SC 22 NC: 2024:KHC-D:6698 he had no authority or juri iction to pass the order. Under such circumstances, both the contentions taken by the petitioner that there is violation of principles of natural justice or the order is passed without juri iction cannot be accepted.

Learned High Court Government Pleader submits that, the impugned order passed under Section 73(9) of the Karnataka Goods and Services Tax Act, 2017 (“KGST Act” for short) and it is appealable under Section 107 of the KGST Act.

Perused the materials on record.

When the question regarding maintainability of the writ petition was raised by learned High Court Government Pleader, learned counsel for the petitioner contended that there is violation of principles of natural justice and the order impugned is passed without any juri iction and therefore in view of the decision of the Hon’ble Apex Court in Whirlpool Corporation Supra, this Court can exercise the writ juri iction. NC: 2024:KHC-D:6698

The first contention taken by learned counsel for the petitioner is that there is violation of principles of natural justice. Admittedly, a show cause notice as required under law was issued before passing the impugned order and the petitioner has submitted his reply to the said show cause notice. The impugned order was came to be passed considering the reply given by the petitioner. The contention of the petitioner that it is not a speaking order also cannot be accepted as respondent No.3 has discussed at length about the facts of the case, defence taken by the petitioner and also the reasons are assigned to arrive at a conclusion that the petitioner is liable to pay tax. Therefore, the contention of the petitioner that the order is not a speaking order that there is violation of principles of natural justice, cannot be accepted.

The second contention taken by the petitioner is with regard to the juri iction of respondent No.3 for passing the impugned order. It is respondent No.3-the Assistant Commissioner of Commercial Taxes who is authority to pass the impugned order under KGST Act. Therefore, the second contention taken by the petitioner that, respondent No.3 had no juri iction to pass order also cannot be accepted. NC: 2024:KHC-D:6698

When both the grounds urged by the petitioner to bypass the statutory appeal provisions and to rush to this Court cannot be accepted, the petitioner cannot maintain the writ petition. There are absolutely no reasons for not invoking Section 107 of KGST Act. The petitioner could have raised all his defence before the Appellate Authority under Section 107 of the KGST Act. The petitioner has not chosen to do so but approached this Court without assigning any valid reasons.

When an effective and efficacious remedy, as provided under the statute to prefer an appeal under Section 107 of the Act is available, I do not find any justification for this Court to invoke the writ juri iction. Even though an attempt is made to contend that there is violation of principles of natural justice and the order is passed without juri iction, the same are urged only to bring the petitioner within the four corners of the decision of the Hon’ble Apex Court, relied on by the petitioner. Unfortunately, in each and every case, such grounds are urged but it can be a ground to invoke the writ juri iction of this Court by bypassing the statutory remedy which is available for the petitioner. When the legislature in their wi om make provisions to challenge the order passed under NC: 2024:KHC-D:6698 the enactment, simply because Section 107 of the Act compels the petitioner to deposit 10% of the disputed amount of tax as referred to under Section 107(6)(b) of the KGST Act, such effective remedy cannot be bypassed. If this Court starts entertaining the writ petition on such flimsy ground, it will definitely have an effect of bypassing the statutory authorities to assume juri iction.