M/S Adcl vs. The State Of Telangana

Held

The Court held that mere breach of principles of natural justice is not sufficient grounds to entertain a writ petition under Article 226 of the Constitution when an effective alternative statutory remedy is available. The Court referred to the Supreme Court's judgment in Whirlpool Corporation v. Registrar of Trade Marks, Mumbai, which allows for entertaining writ petitions despite alternative remedies in certain parameters, including violation of natural justice. However, it also cited U.P. State Spinning Co. Ltd. v. R.S. Pandey, emphasizing that a writ petition should not normally be entertained unless there is something going to the root of the jurisdiction or a case of palpable injustice would result from forcing the petitioner to avail the alternative remedy. The Court found no such ingredients in the present petition. Furthermore, the Court noted the Supreme Court's decision in PHR Invent Educational Society v. UCO Bank, which disapproved of entertaining writ petitions when an effective remedy exists, especially in matters involving recovery of public dues, stating that while the rule of exhaustion of alternative remedy is a rule of discretion, there is no compulsion for High Courts to entertain such petitions. Consequently, the Court was not inclined to entertain the writ petition. However, in the interest of justice, the petitioner was granted liberty to prefer an appeal within fifteen days, and the appellate authority was directed to decide the appeal on merits without dismissing it on grounds of delay.

Facts

The petitioner, M/s ADC!,, filed a writ petition before the Telangana High Court challenging an Order-in-Original (OIO) dated 29.09.2023, pertaining to the financial year 2016-17. The petitioner contended that the OIO was illegal, arbitrary, and violative of principles of natural justice and CGST Act provisions. Specifically, the petitioner argued that their reply to the show-cause notice was not considered, they were denied three opportunities for personal hearing, and the OIO was not uploaded as required by Rule 142(5) of the CGST Rules, 2017. The respondents, including the State of Telangana and various GST authorities, opposed the petition, primarily arguing that an alternative statutory remedy of appeal was available. The petitioner also filed an interlocutory application seeking to defreeze their bank account.

Key Issues

1. Whether the High Court should entertain a writ petition under Article 226 of the Constitution of India challenging an Order-in-Original, despite the availability of a statutory alternative remedy of appeal, on grounds of violation of principles of natural justice and procedural impropriety? (Premised on Article 226 of the Constitution of India and principles of natural justice). Petitioner's Arguments: The petitioner argued that the writ petition should be entertained directly because their reply to the show-cause notice was not considered, they were denied sufficient opportunities for personal hearing, and the Order-in-Original was not uploaded as required by Rule 142(5) of the CGST Rules, 2017. They relied on the Madhya Pradesh High Court's decision in Akash Garg v. State of M.P. to support their claim for direct entertainment. Respondents' Arguments: The respondents, represented by the learned Senior Standing Counsel for CBIC, opposed the prayer, primarily contending that the order was appealable and the petitioner should avail the statutory alternative remedy. They did not advance arguments on the merits of the petitioner's claims regarding procedural impropriety.