M/S Samaskara Resort, Legal Name Saboo Sodium Choloro Limited vs. Union Of INDIA

Facts

The petitioner, M/s Samaskara Resort (Legal Name Saboo Sodium Choloro Limited), challenged an order dated 16.01.2025 passed by the Additional Commissioner, CGST & Central Excise Commissionerate, Jaipur. The petitioner commenced hotel business on 01.05.2018 and issued its first customer invoice on 02.07.2018. An agreement was entered into with OYO Group on 18.04.2019. Following searches at OYO's premises and later at the petitioner's premises on 30.11.2021, a show-cause notice was issued. This notice alleged that invoices amounting to Rs. 1,35,78,220/- and Rs. 1,20,17,459/- were paid as commission by the petitioner to M/s Oravel Stays Limited and M/s OYO Hotels and Homes Private Limited, respectively. The petitioner responded, but the proceedings led to the impugned order. The petitioner contended that additions were made for periods prior to its business commencement and that crucial documents were ignored.

Held

The Court held that no case was made out for interference in writ jurisdiction. It found that the petitioner had not demonstrated a violation of the principles of natural justice, infringement of fundamental rights, or that the order was passed without jurisdiction. The Court noted that the department acted based on material collected during search proceedings at both OYO and the petitioner's premises. Crucially, the Court observed that the petitioner had not submitted booking, sale registers, or agreements for the period from July 2017 to 2019, while OYO and M/s Oravel Stays Limited had shown receipt of commission from the petitioner during those years. The contention that the hotel business commenced after May 2018 was considered a disputed question of fact requiring evidence, which should be adjudicated in appeal. The Court also noted other findings in the impugned order regarding GST on restaurant services. Therefore, the petition was dismissed, relegating the petitioner to the statutory remedy of appeal. All pending applications were also dismissed.

Key Issues

1. Whether the High Court should entertain a writ petition under Article 226 of the Constitution of India despite the availability of a statutory remedy of appeal against the impugned order dated 16.01.2025 passed by the Additional Commissioner, CGST & Central Excise Commissionerate, Jaipur? Petitioner's Arguments: The petitioner argued that the impugned order was passed erroneously, making additions for periods before the hotel business commenced (July 2017 to April 2018), despite evidence like booking registers, police verification records, and audit reports being submitted. They contended that the order was based on a hypothetical basis and ignored crucial documents. Respondents' Arguments: The respondents raised a preliminary objection regarding the maintainability of the writ petition, asserting that the petitioner has a statutory remedy of appeal against the impugned order. They further argued that the petitioner failed to make out a case for violation of principles of natural justice, infringement of fundamental rights, or an order passed without jurisdiction. They highlighted that the petitioner did not produce documents regarding bookings through OYO and that the commencement of business after May 2018 is a disputed question of fact requiring evidence, which should be addressed in the appellate proceedings. They also noted discrepancies in GST collection on restaurant services.