Ajay Singh S/O Sh. Lakhmi Chand Sharma vs. Union Of INDIA
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The petitioner, Ajay Singh, proprietor of M/s S.I. Trading, filed a writ petition challenging an order passed by GST authorities. The petitioner contended that the order was passed without complying with the principles of natural justice, as his reply to a show cause notice was not properly considered. He also argued that a Circular dated 06.07.2022 was not considered and the demand was wrongly raised under Section 74 of the CGST Act, 2017, with penalty under Section 122(1)(vii). The impugned order had noticed the petitioner's contentions and a reply was filed after a show cause notice was issued.
Held
The Court held that the principles of natural justice were not violated because a show cause notice was issued to the petitioner and a reply was filed. While the petitioner alleged that his contentions in the reply were not properly considered, the Court found that the correct approach for such grievances is to pursue the alternate remedy available under Section 107 of the CGST Act, 2017, before the Appellate Authority. The Court reasoned that the Appellate Authority is the appropriate forum to examine all contentions, including whether the demand was correctly raised under Section 74 or if only a penalty under Section 122(1)(vii) was applicable, as these involve factual aspects like the issuance of invoices. The Court explicitly refrained from entertaining the writ petition at this stage, leaving it open for the petitioner to file an appeal.
Key Issues
1. Whether the principles of natural justice were violated by the GST authorities in passing the impugned order, thereby warranting the entertainment of a writ petition directly, despite the availability of an alternate remedy under Section 107 of the CGST Act, 2017? Petitioner's arguments: The petitioner argued that the principles of natural justice were violated because his reply to the show cause notice was not properly considered by the authorities. He relied on the Supreme Court judgment in M/s Magadh Sugar & Energy Ltd. Vs. State of Bihar & Ors. to assert that a writ petition is maintainable even with an alternate remedy if natural justice is breached. He further contended that a Circular dated 06.07.2022 was ignored and the demand was incorrectly raised under Section 74, while the penalty was imposed under Section 122(1)(vii). Respondents' arguments: The respondents did not explicitly record arguments in the judgment, but the Court's reasoning implies that they likely contended that the principles of natural justice were not violated as a show cause notice was issued and a reply was filed, and that the proper forum for challenging the consideration of the reply and the factual aspects of the demand was the appellate authority.
Sections Cited
Section 107, Section 74, Section 122(1)(vii)
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Cause title — parties, addresses and appearances
Order 10/02/2026
Heard.
Learned counsel for the petitioner has relied on the judgment passed by the Hon’ble Supreme Court in the case of M/s Magadh Sugar & Energy Ltd. Vs. State of Bihar & Ors. (Civil Appeal No.5728 of 2021) and submitted that alternate remedy available under Section 107 of the Central Goods & Services Tax Act, 2017
[2026:RJ-JP:6172-DB] (2 of 3) [CW-18918/2025] (for short ‘the Act of 2017’) would not in any manner infringe upon his right to file a writ petition challenging the impugned order as the same has been passed without complying with the principles of natural justice. The submission is that while a reply was filed, the same had not been properly considered by the authorities while passing the impugned order. It is his submission that Circular dated 06.07.2022 has not been considered and the demand has wrongfully been raised under Section 74 from the petitioner.
While additionally imposing penalty in terms of Section 122 (1)(vii) of the Act of 2017, we find that the petitioner’s contentions have been noticed in the impugned order. A show cause notice was given to the petitioner whereafter reply has been filed.
We, therefore, do not agree with the learned counsel for the petitioner that principles of natural justice have been violated. If a show cause notice would not have been given and the order would have been passed then perhaps he had a case for directly entertaining the petition. However, if the contentions raised in the reply are alleged to have not been properly considered, the correct approach would have been to take up all the remedies before the Appellate Authority where all the contentions can be raised. The aspect whether the petitioner is liable under Section 74 of the Act of 2017 or is liable only with respect to the penalty in terms of Section 122 (1)(vii) of the Act of 2017, can best be examined by the Appellate Authority as the factual aspects relating to having issued the invoices themselves or by another
[2026:RJ-JP:6172-DB] (3 of 3) [CW-18918/2025] entity is a purely factual scenario, which the concerned Appellate Authority has to examine.
Leaving it open for the petitioner to file an appeal and directing the same to be considered on merits, we refrain from entertaining the writ petition, at this stage, with liberty to file an appeal within a period of 15 days. If such an appeal is filed, the same shall be heard and decided on merits within a period of three months. It is directed that the Appellate Authority shall also take a decision whether the pre-deposit is required to be made by the petitioner or not, in the facts of the case, and may pass appropriate orders of condoning the requirement of pre-deposit.
The petition is, accordingly, disposed of. (SANGEETA SHARMA),J (SANJEEV PRAKASH SHARMA),ACTING CJ RAHUL MIRKHANI/18
Reproduced from the public record of the Rajasthan High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.