M/S Mohd Maqbool Lone vs. Union Territory Of J And K And Others (State Taxes Department)

Held

The Court held that the writ petition is not maintainable. While acknowledging the power of the High Court under Article 226, the Court emphasized that it is discretionary and should not ordinarily be entertained when an effective alternative statutory remedy is available. The Court found that the petitioner had participated in the proceedings by filing a reply to the show cause notice and did not specifically demand a personal hearing. Therefore, the claim of violation of principles of natural justice was not substantiated. The Court also noted that the petitioner did not contend that the respondent was not a competent authority to pass the order under Section 74 of the Act. Consequently, the Court found no exceptions to the rule of exhaustion of statutory remedies in this case. The petitioner was relegated to the statutory remedy of appeal under Section 107 of the Act. The Court did not decide on the merits of the demand raised in the impugned order.

Facts

The petitioner, M/s Mohd Maqbool Lone, an assessee registered under GST, challenged an order dated December 31, 2025, passed by the respondent authorities. This order raised a demand of Rs. 36,00,58,562.16/- for the Financial Year 2018-2019, on account of GST interest and penalty, purportedly under Section 74 of the Goods and Services Tax Act, 2017. The petitioner invoked the writ jurisdiction of the High Court under Article 226 of the Constitution of India, challenging the order on multiple grounds, primarily touching upon its merits. The respondents are the Union Territory of JK & Ors.

Key Issues

1. Whether the writ petition is maintainable before this Court under Article 226 of the Constitution of India in the presence of an equally efficacious statutory remedy of appeal under Section 107 of the Goods and Services Tax Act, 2017? Petitioner's contention: The petitioner argued that the writ petition is maintainable because the impugned order was passed in violation of the principles of natural justice, specifically by denying the right of a personal hearing, thus falling within the exceptions to the rule of exhaustion of alternative remedies. Revenue/State's contention: The respondents contended that an effective alternative statutory remedy is available to the petitioner under Section 107 of the Act, and therefore, the writ petition should not be entertained. They also argued that the petitioner had participated in the proceedings and submitted a reply to the show cause notice, and did not demand a personal hearing.