Case Law Details
Sriveda Sattva Pvt. Ltd. Vs State of Haryana & others (Punjab and Haryana High Court)
The Punjab and Haryana High Court examined a writ petition seeking to set aside a summary show cause notice dated 20 May 2024 directing deposit of ₹8.90 crore and the Order-in-Original dated 23 August 2024. The petitioner contended that no opportunity of hearing was granted and that it was unaware of the proceedings until an amount was debited from its electronic ledger. It was argued that the show cause notice and the Order-in-Original were passed without recording reasons and in violation of principles of natural justice. The petitioner attributed its lack of awareness to a logistics support arrangement with a clearing and forwarding agent that handled business operations until July 2022, after which the business premises were shifted.
Read SC Judgment in this case: SC Quashed GST Demand Due to Lack of Proper Service of Show Cause Notice
The Court noted that the petitioner informed the authorities of the change of address only after the Order-in-Original was passed and that there was no specific pleading that the show cause notice and order were not uploaded on the portal. The Court emphasized the availability of effective alternate statutory remedies and found no extraordinary or exceptional circumstances warranting interference under Article 226. Relying on settled Supreme Court jurisprudence on judicial restraint where alternate remedies exist, particularly in fiscal matters, the Court declined to interfere. The writ petition was dismissed with liberty to the petitioner to pursue statutory appellate remedies and raise all available pleas, including delay, without any opinion on merits.
FULL TEXT OF THE JUDGMENT/ORDER OF PUNJAB AND HARYANA HIGH COURT
1. Prayer in this petition is for setting aside summary of show cause notice dated 20.05.2024 directing petitioner to deposit a sum of Rs.8,90,12,512/- as well as Order in Original dated 23.08.2024.
2. Learned counsel for petitioner submits that no opportunity of hearing was afforded to petitioner. Petitioner was not even aware of said proceedings, till, an amount of Rs.54,86,263/- was debited from its electronic ledger. It is due to not being aware of initiation or pendency of proceedings, that petitioner therein could not join therein. Therefore, this writ petition should be entertained by this Court as there is gross violation of principles of natural justice. Otherwise also, show cause notice (DRC-01) and Order in Original had been passed de hors the provisions of law without recording any reasons, displaying total non-application of mind. It is, thus, prayed that this writ petition be allowed.
3. Having heard learned counsel, we do not find any ground to cause interference in exercise of jurisdiction under Article 226 of the Constitution of India. It is to be noted that plea taken by petitioner is that it had entered into a logistic support with Clearing and Forwarding Agent (CFA) from 22.07.2017 till 22.07.2022 and this agreement was extended till 31.07.2022. It is submitted that CFA was incharge of business transactions of petitioner-company including providing provision of warehouse facility and all day to day business transactions. Business premises of petitioner which were earlier situated at Gurugram and under the complete care and supervision of CFA in question, were shifted to Delhi in the month of July, 2022 on the CFA Agreement coming to an end. Petitioner was, thus, not aware of the proceedings therefore could not submit its reply to show cause notice dated 22.05.2024.
4. On a pointed query to learned counsel for petitioner, it is informed that intimation of change of address was given by petitioner after passing of Order-in-Original dated 23.08.2024. There is no specific pleading in the writ petition that the said documents i.e. show cause notice dated 22.05.2024 and Order-in-Original dated 23.08.2024 were not uploaded on the portal.
5. Be that as it may, we take note of the fact that alternate remedy(ies) is/are available to the petitioner and no extraordinary or exceptional circumstance is pointed out by learned counsel for petitioner, which calls for interference by this Court in exercise of jurisdiction under Article 226 of Constitution of India. All pleas raised before us are very well within the realm of consideration of Appellate Authority. It is a settled position that interference by Court in such like matters at this stage has to be minimal. Gainful reference in this regard can be made to judgement of Hon’ble the Supreme Court in case of Union Bank of India v. Satyawati Tandon and others, 2010(8) SCC 110, wherein it has been held as under:-
“18. While expressing the aforesaid view, we are conscious that the powers conferred upon the High Court under Article 226 of the Constitution to issue to any person or authority, including in appropriate cases, any Government, directions, orders or writs including the five prerogative writs for the enforcement of any of the rights conferred by Part III or for any other purpose are very wide and there is no express limitation on exercise of that power but, at the same time, we cannot be oblivious of the rules of self-imposed restraint evolved by this Court, which every High Court is bound to keep in view while exercising power under Article 226 of the Constitution. It is true that the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, but it is difficult to fathom any reason why the High Court should entertain a petition filed under Article 226 of the Constitution and pass interim order ignoring the fact that the petitioner can avail effective alternative remedy by filing application, appeal, revision, etc. and the particular legislation contains a detailed mechanism for redressal of his grievance. It must be remembered that stay of an action initiated by the State and/or its agencies/instrumentalities for recovery of taxes, cess, fees, etc. seriously impedes execution of projects of public importance and disables them from discharging their constitutional and legal obligations towards the citizens. In cases relating to recovery of the dues of banks, financial institutions and secured creditors, stay granted by the High Court would have serious adverse impact on the financial health of such bodies/institutions, which ultimately prove detrimental to the economy of the nation. Therefore, the High Court should be extremely careful and circumspect in exercising its discretion to grant stay in such matters. Of course, if the petitioner is able to show that its case falls within any of the exceptions carved out in Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad AIR 1969 SC 556, Whirlpool Corporation v. Registrar of Trade Marks, Mumbai (1998) 8 SCC 1 and Harbanslal Sahnia and another v. Indian Oil Corporation Ltd. and others (2003) 2 SCC 107 and some other judgments, then the High Court may, after considering all the relevant parameters and public interest, pass appropriate interim order.
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25. In Raj Kumar Shivhare v. Assistant Director, Directorate of Enforcement and another (2010) 4 SCC 772, the Court was dealing with the issue whether the alternative statutory remedy available under the Foreign Exchange Management Act, 1999 can be bypassed and jurisdiction under Article 226 of the Constitution could be invoked. After examining the scheme of the Act, the Court observed:
“31. When a statutory forum is created by law for redressal of grievance and that too in a fiscal statute, a writ petition should not be entertained ignoring the statutory dispensation. In this case the High Court is a statutory forum of appeal on a question of law. That should not be abdicated and given a go-by by a litigant for invoking the forum of judicial review of the High Court under writ jurisdiction.”
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26. In Modern Industries v. Steel Authority of India Limited (2010) 5 SCC 44, the Court held that where the remedy was available under the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993, the High Court was not justified in entertaining a petition under Article 226 of the Constitution.”
6. This position has been reiterated by Hon’ble the Supreme Court in subsequent decisions.
7. Keeping in view the facts and circumstances of the case, we do not find any ground whatsoever to cause interference, at this stage. However, petitioner is at liberty to avail remedy(ies) available to it in accordance with law while taking all available pleas and is also at liberty to set forth and explain the delay, if any, before the Appellate Authority. It is clarified that there is no expression of opinion on merits of the matter or delay, if any, and the same are for consideration by Appellate Authority in accordance with law. Observations in this order are solely for purpose of decision of this writ petition.
7. Present writ petition is, accordingly, dismissed with liberty as aforementioned.
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