M/S Manak Poly Chem Enterprises vs. State Of Rajasthan

Held

The Court held that while the petitioner might have grounds to challenge the order passed by the authority, the existence of a statutory remedy of appeal under Section 107 of the Central Goods and Services Tax/Rajasthan Goods and Services Tax Act, 2017, ordinarily precludes the High Court from entertaining a writ petition under Article 226 of the Constitution of India. The Court noted that exceptions to this rule exist, such as when an order is passed without jurisdiction, actuated by mala fides, or in violation of the principles of natural justice. However, the Court found that the petitioner's contention regarding lack of proper verification and opportunity of hearing could be effectively addressed through the statutory appeal mechanism. Therefore, the Court did not find sufficient grounds to entertain the writ petition directly. The Court did not expressly leave any issue undecided.

Facts

The petitioner, M/s Manak Poly Chem Enterprises, filed a writ petition challenging an order dated 27.02.2023, which disallowed their claim for transitional credit of SGST. The petitioner contended that the order was passed without proper verification, without considering the material on record, and without affording an opportunity of hearing. The respondents, represented by the State Tax Department and the Central Goods and Services Tax Department, argued that the petitioner's claim for transitional credit had been allowed on previous occasions after due verification. They also stated that a notice was issued to the petitioner before the impugned order was passed, thus refuting the claim of denial of hearing. The tax period and the specific amount in dispute were not explicitly stated in the judgment.

Key Issues

1. Whether the impugned order dated 27.02.2023, disallowing the petitioner's claim for transitional credit of SGST, was passed without due consideration of material on record, proper verification, and without affording an opportunity of hearing, thereby violating principles of natural justice? (Question of mixed law and fact, turning on principles of natural justice and procedural fairness under GST law). Petitioner's Arguments: The petitioner argued that the order was passed arbitrarily without proper verification and consideration of the available material, and crucially, without providing an adequate opportunity to be heard, thus vitiating the order on grounds of procedural unfairness. Respondents' Arguments: The respondents contended that the petitioner's claim for transitional credit had been allowed previously after due verification. They asserted that a notice was issued to the petitioner prior to the passing of the order, thereby fulfilling the requirement of providing an opportunity of hearing. They did not rely on any specific circulars or precedents but argued based on the procedural steps taken.