Pawan Traders Through Its Proprietor Pawan Agarwal vs. The State Of Madhya Pradesh

Held

The High Court held that the writ petition is not maintainable. The Court noted that the petitioner had an alternative remedy of appeal under Section 107 of the GST Act. It was observed that the petitioner had suppressed the fact that a final assessment order dated February 28, 2024, had already been passed. The writ petition was filed after this final order was issued, and the petitioner had not challenged it. The Court reasoned that writ jurisdiction cannot be invoked when an effective alternative remedy exists and the statutory remedies have not been exhausted. The Court found it likely that the petition was filed to circumvent the expiry of the appeal limitation period and the requirement of a pre-deposit of 10% of the demand. Therefore, the petition was dismissed. The petitioner was granted liberty to file an appeal in accordance with the law.

Facts

The petitioner, Pawan Traders, challenged a show-cause notice dated January 11, 2024, issued by GST authorities. The petitioner, operating a grocery shop, had not obtained GST registration as their turnover was below ₹20 lakhs. A search of their premises was conducted on September 22, 2022, under Section 67(1) of the MP GST Act. During the search, goods valued at ₹15,07,364/- were found, with an alleged evasion of ₹10 lakhs. The petitioner was issued a summons under Section 70 and subsequently a notice under Section 73/74 of the GST Act demanding ₹14,96,228/- with interest and penalty. The petitioner raised objections, stating the firm was not a taxable person and a temporary ID was wrongly generated. Crucially, a final assessment order dated February 28, 2024, was passed, which the petitioner failed to challenge in the present writ petition.

Key Issues

1. Whether the writ petition is maintainable when an effective alternative remedy of appeal under Section 107 of the GST Act is available, and a final assessment order has already been passed and not challenged by the petitioner? Petitioner's Argument: The petitioner's primary argument, as understood from the context of challenging the show-cause notice, would likely be that the show-cause notice and subsequent proceedings are flawed due to the alleged incorrect generation of a temporary ID and the firm not being a taxable person. They would argue that these fundamental issues warrant intervention by the High Court under its writ jurisdiction. Revenue's Argument: The respondent/State argued that the writ petition is not maintainable because the petitioner has an alternative statutory remedy of appeal under Section 107 of the GST Act. They contended that the petitioner has suppressed the fact that a final assessment order was passed on February 28, 2024, and that the writ petition was filed after this order was issued. The State emphasized that the petitioner has failed to exhaust the available statutory remedies, making the writ petition liable for dismissal on this ground alone.