M/S Satakshi Contractors PVT. LTD. Thru. Director Mr. Bhoop Narayan Singh vs. State Of U.P. Thru. Addl. Chief Secy. State Tax Govt. Of U.P. Lko. U.P. And 2 Others

Facts

The petitioner, M/s Satakshi Contractors Pvt. Ltd., filed a writ petition challenging an order dated 16.04.2024 passed under Section 73 of the GST Act. The respondent, the State of U.P. through its officials, raised an objection that an appeal was the appropriate remedy and had not been filed. The petitioner argued that the writ petition was maintainable because the impugned order suffered from procedural irregularities, specifically a lack of proper opportunity for hearing, thus bypassing the appellate remedy. The Court examined the show cause notice and the notice of hearing, noting discrepancies in the dates provided for filing a reply and the hearing itself.

Held

The Court held that the writ petition was maintainable. On Issue 1, the Court found that the impugned order was prima facie in violation of the principle of natural justice and the mandate of Section 75(4) of the GST Act. This was based on the conjoint reading of the show cause notice and the notice of hearing, which revealed that no proper opportunity of hearing was afforded to the petitioner. Specifically, the date for filing the reply was fixed after the date of hearing in one instance, and no date for hearing was fixed in another notice. The Court reasoned that such procedural defects, leading to a violation of natural justice, justify bypassing the alternative remedy of appeal. The ratio decidendi is that where an order is demonstrably vitiated by a lack of natural justice and statutory non-compliance, a writ petition can be entertained. The Court allowed the writ petition, quashed the order dated 16.04.2024, and remanded the matter to the authority to pass a fresh order in accordance with the law.

Key Issues

1. Whether the writ petition is maintainable despite the existence of an alternative remedy of appeal, given the alleged violation of principles of natural justice and statutory provisions? (Question of law and fact, turning on Section 73 and Section 75(4) of the GST Act). Petitioner's contentions: The petitioner argued that the writ petition was maintainable because the impugned order was passed without affording a proper opportunity of hearing, violating the principles of natural justice. They relied on the Supreme Court's decision in Whirlpool Corporation vs. Registrar of Trade Marks Mumbai and others and a previous High Court judgment in Writ Tax No.1029 of 2021 (Bharat Mint and Allied Chemicals vs. Commissioner Commercial Tax). Respondent's contentions: The respondent, represented by the Standing Counsel, contended that an appeal lies against the order and the petitioner had not availed this remedy, thus arguing against the maintainability of the writ petition.