Alternative remedy under Section 107 doesn't bar writ petition when natural justice principles are violated

The Allahabad HC held that alternative remedy under Section 107 does not bar writ petition under Article 226 when natural justice principles are violated. The court found that SCN failed to provide mandatory hearing details and Section 74(9) proceedings lacked personal hearing opportunity. Citing exceptions to alternative remedy rule, particularly violation of natural justice, the HC accepted the petition. The court distinguished between "opportunity of hearing" under Section 75(4) and personal hearing requirements, staying the impugned assessment orders pending final judgment while reserving decision on the substantive challenge.

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Issues Involved:
1. Validity of the impugned orders and show cause notice issued u/s 74 of the UPGST Act, 2017.
2. Compliance with the principles of natural justice and opportunity of personal hearing u/s 75(4) of the UPGST Act, 2017.

Summary:

Issue 1: Validity of the impugned orders and show cause notice issued u/s 74 of the UPGST Act, 2017.

The petitioner challenged the order and show cause notice issued u/s 74 of the UPGST Act, 2017, claiming non-compliance with procedural requirements. The petitioner argued that despite compliance with audit notices, no audit report was issued, and the show cause notice lacked details of hearing, violating the principles of natural justice. The respondents contended that the petitioner had a statutory remedy u/s 107 of the Act, which should be pursued.

Issue 2: Compliance with the principles of natural justice and opportunity of personal hearing u/s 75(4) of the UPGST Act, 2017.

The petitioner argued that u/s 75(4) of the Act, an opportunity of personal hearing is mandatory where requested or where an adverse decision is contemplated. The petitioner relied on judgments from Co-ordinate Benches in similar cases, emphasizing the necessity of personal hearings to ensure compliance with natural justice principles. The court examined Section 75(4) and related judgments, concluding that the statutory mandate for personal hearing was violated.

The court observed that the respondents' argument that no personal hearing was required under Section 74(9) was not tenable. The court highlighted that Section 75 provides general provisions for tax determination, applicable to actions under Sections 73 and 74, and mandates personal hearings.

The court reserved the order and stayed the impugned orders until the pronouncement of the judgment.

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