A T Traders vs. The Assistant Commissioner (St)
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Cause title — parties, addresses and appearances
The Court made the following: ORDER
% APHC010452992023 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Juri iction) [3438] WEDNE AY ,THE NINETEENTH DAY OF JUNE TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE U.DURGA PRASAD RAO THE HONOURABLE SRI JUSTICE A V RAVINDRA BABU WRIT PETITION NO: 23533/2023 Between: M/s. A.T. Traders ...PETITIONER AND The Assistant Commissioner St and Others ...RESPONDENT(S) Counsel for the Petitioner: 1.VSIDDHARTH REDDY Counsel for the Respondent(S):
GP FOR COMMERCIAL TAX The Court made the following ORDER: (Per Hon’ble Sri Justice U. Durga Prasad Rao) The petitioner prays for writ of mandamus declaring the action of the respondent in cancelling the registration of the petitioner
2 under CGST/APGST Act. 2017 as illegal, arbitrary, highhanded and vitiated on account of violation of principles of natural justice and violative of Articles 19 and 21 of the Constitution of India and consequently set aside the impugned proceedings of the 1®* respondent in Form GST REG-19, dated 25.07.2023 and pass such other orders deemed fit in the circumstance of the The petitioner’s case succinctly is thus; (a) Petitioner is a proprietary concern engaged in the business of purchase and sale of iron scrap and petitioner is registered with GSTIN No. 37CDKPA7987F1Z4 on the rolls of 1^‘ respondent. The petitioner has been regularly filing monthly returns and making payment of taxes as per GST Act. 2017 after availing ITC. (b) While so. 1®‘ respondent issued a show cause notice dated 05.07.2023 U/s 29 of SGST Act r/w Rule 21 of CGST Rules. 2017 proposing to cancel the registration of the petitioner on the alleged ground that the suppliers of the goods to the purchaser has availed ITC without actual receipt of goods and indulged in passing on such credit to the petitioner without supply of goods. The 1®‘ respondent, in this regard relied on certain alleged reports allegedly received by him in respect of few suppliers by the respective GST authorities. However, the petitioner was not supplied the reports allegedly sent by respective GST authorities of the suppliers of the petitioner, spite of his obligation under law to supply all the incriminating material along with show cause notice to enable the petitioner to case. 2. in 3 respond in an effective manner even the allegations leveled in the show cause notice were also not correct. They are baseless and contrary to the Assessment Order. (c) In response to the show cause notice, the petitioner filed a detailed objections dated 13.07.2023 disputing the allegations made in the show cause notice and requested to drop the proposed action. Petitioner contended that if for argument sake the allegations of fake invoices and claim of ITC without movement of goods as alleged by the respondent is admitted to be true and consequently there is purchase of goods by the petitioner, equally there cannot be any sale of goods by the petitioner, inasmuch as, without inward receipt there cannot be outward sale of goods. Thus, if the 1 no of goods respondent disbelieves the purchases, he should equally disbelieves the sales. However, without considering all these aspects, the 1®‘ respondent passed the impugned order dated 25.07.2023 cancelling the registration of the petitioner on untenable grounds and also on the grounds which were not raised in the show cause notice. The impugned order is in violation of principles of natural justice as the alleged reports issued by the GST authorities which are the basis for issuing show cause notice were not supplied to the petitioner. It is further submitted that since the petitioner was not properly advised, he could not file a petition U/s 30 of COST Act, 2017 for revocation of registration.
Hence the writ petition.
A Heard arguments of learned counsel for the petitioner Sri V. Siddharth Reddy and learned Government Pleader for Commercial Taxes for respondents.
The pivotal argument of learned counsel for the petitioner Sri V. Siddharth Reddy is that the petitioner never indulged in bogus purchases or supplies to accommodate his suppliers to claim ITC fraudulently. While issuing show cause notice, the 1®' respondent who claims to have relied on certain reports allegedly submitted to him by certain GST Authorities, has not forwarded those reports to inform the petitioner with which of the dealers the petitioner made bogus transactions to facilitate them to claim ITC wrongfully, so as to give an opportunity to the petitioner to submit an effective reply. Learned counsel thus vehemently argued that principles of natural justice have been violated and therefore the impugned order liable to be set aside.
Per contra, learned Government Pleader for Commercial Taxes argued that the writ petition is not maintainable, inasmuch as, the petitioner has alternative remedy to file a petition U/s 30 of APGST Act for revocation of cancellation or to file an appeal against the impugned order before the Appellate Authority U/s 107 of the APGST Act. Learned Government Pleader argued that without pursuing the alternative reliefs the petitioner cannot file the writ petition. Nextiy, learned Government Pleader argued that the show cause notice is self-explanatory as the show cause notice contains
V ot % 5 the particulars of the non-existent dealers from whom the petitioner obtained bogus invoices and therefore the petitioner cannot claim -supply of material and violation of principles of natural justice. He thus prayed to dismiss the writ petition.
The point for consideration is whether there are merits in the writ petition to allow ?
POINT: As can be seen, the prime contention of learned Government Pleader is that since the petitioner has an alternative remedy U/s 30 of GST Act to file an application for revocation of cancellation or to assail the impugned order in the appeal U/s 107 of GST Act, the writ petition is not maintainable. Per contra, the contention of the petitioner is that required particulars are not furnished in the show cause notice dated 05.07.2023 and thereby principles of natural justice have been violated and therefore, the writ petition is maintainable. Law is no more res-integra with regard the maintainability of writ petition when alternative remedy is available to a party. In Whirlpool Corporation v. Registrar of Trade Marks, Mumbai^ the Apex Court has observed thus:
“14. The power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provision of the Constitution. This power can be exercised by the High Court not only for issuing writs in the nature of Habeas Corpus, Mandamus, prohibition, Qua Warranto and Certiorari for the enforcement of any of the Fundamental Rights cotitained in Part III of the Constitution but also for “any other purpose”. non to ^ 1998 (8) see 1 = MANU/Se/0664/1998
6
Under Article 226 of the Constitution, the High Court, having regard to the facts of the case, has discretion to entertain or not to entertain a writ petition. But the High Court has imposed upon Itself certain restrictions one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its juri iction. But the alternative remedy has been consistently held by this court not to operate as a bar in at least three contingencies, namely, where the Writ Petition has been filed for the enforcement of any of the Fundamental rights or where there has been a violation of the principle of natural justice or where the order or proceedings are wholly without juri iction or the vires of an Act is challenged. There is a plethora of case law on this point but to cut down this circle of forensic whirlpool we would rely on some old decisions of the evolutionary era of the constitutional law as they still hold the field.” Thus, Hon ble Apex Court held that in certain contingencies viz., when writ petition is filed for enforcement of fundamental rights, or where there has been a violation of principles of natural justice when the proceedings impugned are wholly without juri iction or the vires of an act is challenged, the writ petition could be maintainable in spite of availability of alternative remedy instant case the petitioner banks upon the violation of principles of natural justice to maintain the writ petition. In this context, a perusal of the show cause notice dated 05.07.2023 shows respondent has given required particulars of the payers from whom the petitioner allegedly obtained bogus invoices. Therefore, we do not find venom in the contention of the petitioner that the show cause notice is bereft of required particulars and thereby the principles of natural justice Admittedly, the petitioner has alternative remedy to challenge the impugned order which he did not avail.
Therefore 8. or In the that the 1 non-existent tax tax were violated. we does not % 7 deserve any order in the writ petition. However, considering that the petitioner’s registration has been cancelled and thereby he cannot continue his business activities, we deem it apposite to give an opportunity to the petitioner to challenge the impugned order either by way of filing a petition U/s 30 of the GST Act or to file an appeal within a reasonable time.
Accordingly, the writ petition is dismissed. However, giving opportunity to the petitioner either to file an application U/s 30 of the GST Act for revocation of cancellation, or to challenge the impugned order by way of filing an appeal and the petitioner can avail either remedy within 15 days from the date of receipt of a copy of this order, in which case the concerned authority shall pass an appropriate order on merits after affording an opportunity of hearing to both parties. No costs. As a sequel, interlocutory applications if any pending, shall stand closed. an K.TATATAO DEPUTY,REGISTRAR //// SECTTON OFFICER To,
One CC to Sri V. Siddharth Reddy, Advocate [OPUC]
Two CCs to GP for Commercial Tax, High Court of Andhra Pradesh. [OUT]
Three CD Copies. ssb
% > . HIGH COURT ■-i i -i- I DATED; 19/06/2024 • .• « I- i 4 . H g 2 5 JUN 202« \ Current Section , ^J ORDER WP.No.23533 of 2023 DISMISSING THE W.P. WITHOUT COSTS
Reproduced from the public record of the Andhra Pradesh High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.