M/S Saisun Outsourcing PVT LTD vs. The Union Ofindia

Held

The Court held that the High Court had erred in entertaining the writ petition under Article 226 of the Constitution of India, bypassing the statutory remedy of appeal. Citing the Apex Court judgments in State of Maharashtra & Others v/s Greatship (India) Limited and PHR Invent Educational Society v/s UCO Bank & Others, the Court emphasized that when an effective alternative remedy is available, judicial prudence dictates that the court should refrain from exercising its jurisdiction under constitutional provisions. The Court found that all grounds raised by the petitioner, including the alleged violation of the principle of natural justice, could be raised before the appellate authority. The Court noted that the petitioner was served with a show-cause notice on 05.04.2021, and the final order was passed on 06.02.2025, and during this period, the petitioner did not raise any complaint about the violation of natural justice. Therefore, the efficacious remedy of appeal was available, and the writ petition was not liable to be entertained. The petition was dismissed with liberty to avail the statutory remedy of appeal.

Facts

The petitioner, M/s Saisun Outsourcing Pvt Ltd, engaged in manpower recruitment and supply services, filed a writ petition challenging an order dated 14.02.2025. The company's premises were searched on 12.03.2019 and 13.03.2019 for verification of records pertaining to financial years 2014-15 to 2017-18. A show-cause notice was issued on 30.08.2019. The Director was arrested and later released on bail. Bank accounts of the petitioner and its Director were attached on 17.09.2019. The petitioner's representation for releasing bank accounts was rejected on 20.12.2019. The petitioner participated in proceedings initiated by a show-cause notice dated 05.04.2021, which they claim was issued in violation of Rule 142 of CGST Rules, 2017, and uploaded on 06.02.2025, with the final order passed on the same day without a DIN.

Key Issues

1. Whether the High Court erred in entertaining a writ petition under Article 226 of the Constitution of India against an assessment order, bypassing the statutory remedy of appeal, as per the principles laid down in State of Maharashtra & Others v/s Greatship (India) Limited? 2. Whether the High Court should entertain a writ petition under Article 226 of the Constitution when an effective alternative remedy is available, as clarified in PHR Invent Educational Society v/s UCO Bank & Others? Petitioner's Contention: The petitioner argued that the alternative remedy under Section 107 of the CGST Act is not a bar in this case because the impugned order was passed in violation of the principles of natural justice. They also contended that the show-cause notice dated 05.04.2021 was issued in violation of Rule 142 of CGST Rules, 2017, and the final order was passed on the same day without a DIN. Revenue's Contention: The respondents, through their counsel, relied on Apex Court judgments indicating that High Courts should not entertain writ petitions when an effective alternative remedy is available, and that the petitioner had not shown valid reasons to bypass the statutory appeal process. They argued that all grounds raised by the petitioner could be raised before the appellate authority.