Chartered Accountant must exhaust Section 107 CGST Act appeal before challenging tax order despite natural justice violation

HC declined to entertain writ petition challenging Order-in-Original dated 22.05.2024 against a Chartered Accountant despite acknowledging violation of natural justice principles. Court distinguished between maintainability and entertainability, emphasizing that availability of statutory appeal remedy under Section 107 of CGST Act, 2017 must be exhausted first. Following SC precedent in PHR Invent Educational Society case, HC directed petitioner to pursue statutory appeal remedy. Petition disposed without costs, with time spent in writ proceedings excluded from limitation period for filing appeal.

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Issues:
Challenge to Order-in-Original dated 22.05.2024 against a Chartered Accountant. Violation of principles of natural justice in passing the order. Maintainability of the petition despite the availability of an alternative remedy. Interpretation of the legal position on maintainability and entertainability of a petition.

Analysis:
The judgment involves a challenge to an Order-in-Original dated 22.05.2024 against a Chartered Accountant. The petitioner argued that the order was passed in violation of principles of natural justice as he was not given the opportunity to review a statement provided by the Department before the personal hearing. The petitioner contended that despite the availability of an appeal under Section 107 of the Central Goods and Services Tax Act, 2017, the petition was maintainable due to the breach of natural justice principles.

The petitioner's counsel highlighted the importance of maintaining the petition despite alternative remedies in certain circumstances, such as the breach of natural justice. The judgment referred to the case law of Whirlpool Corporation v. Registrar of Trade Marks, Mumbai and U.P. State Spinning Co. Ltd. v. R.S. Pandey and Another to emphasize the discretion of the Court in entertaining petitions when there is a palpable injustice or a root jurisdiction issue involved.

The judgment also cited a recent decision of the Supreme Court in PHR Invent Educational Society Vs. UCO Bank and Others, which disapproved the Telangana High Court's order in a similar matter. The Supreme Court highlighted that the High Court should not entertain petitions under Article 226 of the Constitution if an effective remedy is available, especially in cases involving recovery of public dues or taxes. The Court emphasized the importance of exhausting alternative remedies before approaching the High Court.

Based on the legal position established by the Supreme Court decisions, the High Court declined to entertain the petition despite its maintainability. The Court clarified that maintainability and entertainability are distinct, and the availability of an appeal remedy should be exhausted before seeking relief through a writ petition. The petitioner was directed to pursue the statutory remedy of appeal, ensuring that the time spent in the Writ Court would not count towards the limitation period for filing the appeal.

In conclusion, the Writ Petition was disposed of without costs, emphasizing the importance of exhausting statutory remedies before seeking relief through writ petitions. The judgment clarified the distinction between maintainability and entertainability, highlighting the need to follow the legal procedures and remedies established by law.

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