M/S. Nahar Traders Through Its Proprietor, Shri Mithun Kumar Nahar vs. State Of M.P.

Held

The Court held that while the existence of an alternative remedy is generally a bar to entertaining a writ petition, this bar is not absolute when the order is passed without jurisdiction, as per the Supreme Court's decision in Whirlpool Corporation v. Registrar of Trademark & Ors. The Court examined Section 2(91) of the CGST Act, 2017, defining 'proper officer', and Section 6 of the Union Territory GST Act, 2017, which allows State Tax officers to be authorized as proper officers under certain conditions specified by the Government on the recommendation of the Council. The respondent State conceded that there was no recommendation from the Council to the State Government for authorizing Respondent No. 4 as a Proper Officer under Section 6(1). Consequently, the Court found that the impugned order dated 30.12.2025 was passed by an incompetent authority. Therefore, the impugned order was quashed. The Court granted liberty to the Competent Authority to pass a fresh order in accordance with the law. The writ petitions were allowed and disposed of.

Facts

The petitioners, M/s Subhash Chandra Narendra Kumar Nahar and M/s Nahar Traders, filed writ petitions challenging an order dated 30.12.2025 passed by Respondent No. 4, the Assistant Commissioner of State Tax Anti-Evasion Bureau, Indore. This order imposed a total liability of Rs. 7,01,61,092/- on the petitioner in WP-2510/2026. The petitioners contended that Respondent No. 4 was not the 'Proper Officer' as defined under Section 2(91) of the CGST Act, 2017, rendering the order jurisdictionally flawed. The respondents raised a preliminary objection regarding the availability of an alternative remedy of appeal under Section 107 of the CGST Act, 2017, asserting the authority's competence. The State's case involved an inspection revealing inadmissible Input Tax Credit (ITC) claimed by M/s Dakshraj Enterprises and passed on to recipients, including the petitioner, violating Section 16(2)(c) of the M.P.GST Act, 2017.

Key Issues

1. Whether the writ petition is maintainable despite the availability of an alternative remedy of appeal under Section 107 of the CGST Act, 2017, given the challenge to the jurisdiction of the issuing authority? 2. Whether Respondent No. 4, the Assistant Commissioner of State Tax Anti-Evasion Bureau, Indore, is the 'Proper Officer' as defined under Section 2(91) of the CGST Act, 2017, or is authorized under Section 6 of the Union Territory GST Act, 2017, to pass the impugned order? Petitioner's Arguments: The petitioner argued that the order was passed by an incompetent authority, specifically Respondent No. 4, who is not the 'Proper Officer' under Section 2(91) of the CGST Act, 2017. This jurisdictional error vitiates the order, making it liable for quashment, and thus, the writ petition is maintainable despite the alternative remedy. The petitioner also submitted an order from the Commissioner, Commercial Tax, M.P., indicating pecuniary limits for Assistant Commissioners in determining tax under Section 74/74A. Revenue's Arguments: The respondent State argued that Respondent No. 4 is a competent authority, authorized under Section 6(1) of the Union Territory GST Act, 2017. They also raised a preliminary objection regarding the maintainability of the writ petition due to the existence of an alternative and efficacious remedy of appeal under Section 107 of the CGST Act, 2017.