2022 (7) TMI 128 - HC - GST

GST registration cancellation without proper notice violates livelihood rights under Article 21, writ petition maintainable when Section 107 appeal time-barred

The Uttarakhand HC allowed an appeal challenging dismissal of a writ petition regarding GST registration cancellation. The petitioner, a semi-skilled ... Maintenance of writ jurisdiction despite availability of alternative and efficacious statutory remedy - entertainment of writ where statutory appeal is time barred or remedies are illusory - violation of Article 21 - right to livelihood as ground for writ relief - definition and scope of adjudicating authority under the Uttarakhand Goods and Services Tax Act - scope and remedy under Section 107 (appeals) of the Uttarakhand Goods and Services Tax Act, 2017Maintenance of writ jurisdiction despite availability of alternative and efficacious statutory remedy - entertainment of writ where statutory appeal is time barred or remedies are illusory - violation of Article 21 - right to livelihood as ground for writ relief - Writ petition under Article 226 was maintainable notwithstanding the existence of a statutory appeal under Section 107 of the Uttarakhand Act. - HELD THAT: - The Court applied the established principle that availability of an alternative remedy does not oust writ jurisdiction in appropriate cases. It accepted that the High Court may entertain a writ where enforcement of fundamental rights, challenge to vires, violation of principles of natural justice, lack of jurisdiction, or where statutory remedy is rendered ineffective, justifies exercise of discretionary writ jurisdiction. The factual finding that cancellation notices published only on the website were insufficient and that cancellation of GST registration impacted the petitioner's ability to work and earn (thereby engaging Article 21 and right to livelihood) warranted exercise of writ jurisdiction. The Court observed that strict limitation provisions and inability to obtain effective relief by statutory appeal can lead to denial of livelihood and constitute a ground for entertaining writ. Applying these principles, the Single Judge's conclusion that the writ was not maintainable was held to be erroneous. [Paras 7, 8, 9]Writ petition is maintainable; the Single Judge erred in holding otherwise.Definition and scope of adjudicating authority under the Uttarakhand Goods and Services Tax Act - scope and remedy under Section 107 (appeals) of the Uttarakhand Goods and Services Tax Act, 2017 - Characterisation of the officer who passed the impugned order and the applicability of appeal remedy under Section 107 was examined; the matter requires remand for merits. - HELD THAT: - The Court analysed the definition of 'adjudicating authority' in the Uttarakhand Act and the statutory scheme including provisions for appointment and powers of officers (Sections 2, 3 and 5). Observing precedent where the Commissioner was held not to be an 'adjudicating authority' for the purpose of an appeal, the Court noted that Assistant Commissioners operate under the Commissioner and are not shown to act independently under the Act. Having found error in the Single Judge's maintainability conclusion but noting that no merits were considered below on cancellation of registration, the Court did not decide the substantive correctness of the cancellation order. Instead, it remanded the matter to the Single Judge for adjudication on merits. [Paras 12, 13, 14, 15, 16]Matter remanded to the Single Judge for consideration on merits; determination of appealability/competence and correctness of cancellation left to the remand adjudication.Final Conclusion: The appeal is allowed; the High Court's order dismissing the writ as not maintainable is set aside. The writ petition is held maintainable on the grounds stated and the matter is remanded to the Single Judge for fresh consideration on merits. Issues Involved:1. Maintainability of the writ petition despite the availability of an alternative remedy under Section 107 of the Uttarakhand Goods and Services Tax Act, 2017.2. Adequacy of notice provided before the cancellation of GST registration.3. Impact of cancellation of GST registration on the right to livelihood under Article 21 of the Constitution.4. Interpretation of 'adjudicating authority' under the Uttarakhand Act and its implications on the appeal process.Issue-Wise Detailed Analysis:1. Maintainability of the Writ Petition:The appellant challenged the dismissal of his writ petition on the grounds that it was not maintainable due to an alternative remedy under Section 107 of the Uttarakhand Goods and Services Tax Act, 2017. The court referenced the Supreme Court's judgment in Whirlpool Corporation Vs Registrar of Trade Marks, which allows writ petitions even when alternative remedies exist if fundamental rights are enforced, the vires of an Act are challenged, principles of natural justice are violated, or the order is wholly without jurisdiction. The court noted that the statute does not prohibit the exercise of writ jurisdiction under Article 226 of the Constitution, and the practice of not entertaining writ petitions where alternative remedies exist is a self-imposed internal mechanism of the courts.2. Adequacy of Notice Before Cancellation:The court found that the notice given on the website was insufficient. A personal notice should have been provided before the cancellation of the GST registration. This inadequacy allowed the court to invoke its jurisdiction under Article 226 to interfere with the orders passed by the learned Commissioner.3. Impact on Right to Livelihood:The court highlighted the strictness of the law regarding appeals and the hardship faced by the petitioner due to the cancellation of his GST registration. The inability to appeal within the prescribed limitation period left the petitioner without remedy, affecting his right to livelihood. The court emphasized that denial of GST registration affects the petitioner's chances of employment and violates Article 21 of the Constitution, which includes the right to livelihood.4. Interpretation of 'Adjudicating Authority':The court examined whether the Assistant Commissioner of GST qualifies as an 'adjudicating authority' under Section 107 of the Uttarakhand Act. The Supreme Court's judgment in Radha Krishan Industries Vs State of Himachal Pradesh was referenced, which clarified that the expression 'adjudicating authority' does not include the Commissioner. The Uttarakhand Act's definition of 'adjudicating authority' is similar to the Himachal Pradesh Act, and the Assistant Commissioner acts under the control of the Commissioner. Therefore, the court concluded that an appeal under Section 107 does not lie against orders passed by the Assistant Commissioner, including the cancellation of GST registration.Conclusion:The court held that the writ petition was maintainable and the learned Single Judge erred in dismissing it on maintainability grounds. The matter was remanded to the learned Single Judge for consideration on merits, specifically regarding the cancellation of the appellant's GST registration. The Special Appeal was allowed, and the case was directed to be listed before the assigned Single Bench.