Shailesh Rajpal vs. The Union Of INDIA

Held

The High Court dismissed the writ petition, holding that it should not entertain a writ petition under Article 226 of the Constitution when an effective alternative statutory remedy is available. The Court relied on the Apex Court's decisions in State of Maharashtra & Others v/s Greatship (India) Limited and PHR Invent Educational Society v/s UCO Bank & Others. The Court found that the petitioner had not demonstrated any valid reasons to bypass the statutory remedy of appeal. Regarding the alleged violation of the principle of natural justice, the Court noted that the petitioner was served with a show-cause notice on 05.04.2021, and the impugned order was passed on 14.02.2025, during which period no complaint about the violation was raised. Therefore, the efficacious remedy of appeal was available. The Court directed that all grounds raised in the petition could be raised before the appellate authority. The petition was dismissed, with liberty to the petitioner to avail the statutory remedy of appeal.

Facts

The petitioner, a Director of M/s Saisun Outsourcing Private Limited, filed a writ petition challenging an order dated 14.02.2025. The company, engaged in manpower recruitment services, was searched by GST authorities on 12.03.2019 and 13.03.2019 for financial years 2014-15 to 2017-18. A show-cause notice was issued to the company for non-payment of dues. The petitioner was arrested and later released on bail. The CGST Department attached the company's and the petitioner's bank accounts. A subsequent show-cause notice dated 05.04.2021 was issued, which the petitioner claims violated Rule 142 of the CGST Rules, 2017, and the impugned order was passed without a DIN. The petitioner acknowledged an alternative remedy under Section 107 of the CGST Act but argued it was not a bar due to alleged violations of natural justice.

Key Issues

1. Whether the High Court should entertain a writ petition under Article 226 of the Constitution of India against an order passed under the CGST Act when an effective alternative statutory remedy of appeal is available, particularly when the petitioner claims violation of principles of natural justice? Petitioner's contention: The petitioner argued that the writ petition was maintainable despite the availability of an alternative remedy because the impugned order was passed in violation of the principles of natural justice and without mentioning the Document Identification Number (DIN), thus rendering the alternative remedy ineffective. Revenue's contention: The respondents, through their counsel, implicitly argued that the High Court should not entertain the writ petition as a statutory alternative remedy of appeal under Section 107 of the CGST Act is available. They relied on Apex Court judgments emphasizing the preference for statutory remedies over writ jurisdiction when such remedies exist.