TaxTMI 
TaxTMI 
2024 (9) TMI 1485
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.... CHIEF JUSTICE. In this Writ petition, the petitioner has assailed an order dt. 09.02.2024 (Annexure P-1) issued by respondent no.4 by which the said respondent had passed an order for cancellation of petitioner's GST Registration. Inter alia the petitioner has also sought a Writ of Mandamus directing the respondents to revoke the cancellation of the said registration apart from relief to declare Section 16 (2) (c) and Rule 86B of the Rules framed ultra vires the GST Act, 2017 (in short "the Act"). 2. The impugned order dt. 09.02.2024 (Annexure P-1) passed by the 4th respondent records that a Show Cause Notice was issued to the petitioner on 17.01.2024; that a reply to the Show Cause Notice was submitted by the petitioner; and after cons....
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.... the violation is serious enough to warrant cancellation of the GST Registration, which would practically mean death of the business of the petitioner. 8. It is not in dispute that the amount available in Electronic Credit Ledger of the petitioner is the petitioner's own money and it has been used to discharge the petitioner's tax liability, though in excess of 99% of such tax liability. 9. It is not as if there has been any default in discharge of tax liability as such by the petitioner, causing any loss to the Department, since the Show Cause Notice itself was issued by the Department on 17.01.2024 for the period October 2021 to March 2022, April 2022 to March 2023 & April 2023 to January 2024, i.e. almost two years from the date of suc....
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....r the rules made thereunder. 15. In Magadh Sugar & Energy Ltd. v. State of Bihar (2022) 16 SCC 428, at page 442, the Supreme Court held: "20. While a High Court would normally not exercise its writ jurisdiction under Article 226 of the Constitution if an effective and efficacious alternative remedy is available, the existence of an alternative remedy does not by itself bar the High Court from exercising its jurisdiction in certain contingencies. This principle has been crystallised by this Court in Whirlpool Corpn. v. Registrar of Trade Marks and Harbanslal Sahnia v. Indian Oil Corpn. Ltd. Recently, in Radha Krishan Industries v. State of H.P.21 a two-Judge Bench of this Court of which one of us was a part of (D.Y. Chandrachud, J.) has s....
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....invoking the discretionary remedy under Article 226 of the Constitution. This rule of exhaustion of statutory remedies is a rule of policy, convenience and discretion. 27.6. In cases where there are disputed questions of fact, the High Court may decide to decline jurisdiction in a writ petition. However, if the High Court is objectively of the view that the nature of the controversy requires the exercise of its writ jurisdiction, such a view would not readily be interfered with." (emphasis supplied) 16. Section 16 of the Act prescribes the eligibility conditions for taking input tax credit and Section 49 prescribes the method of payment of tax, interest, penalty and fee etc. 17. Sub-Section (1) of Section 49 of the Act provides tha....
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....les the Rule making authority to frame the Rule 86B or other Rules, but the Rules must have backing in the main body of the statute. Otherwise the Rule would be ultra vires. 25. We do find force in the petitioner's contention that Rule 86B of the Act has no statutory backing and appears to be ultra vires the provisions of the HPGST Act, 2017. 26. But we need not base our decision on the said issue. 27. Since the tax liability of the petitioner towards output tax stood discharged, no prejudice has been caused to the respondents. It was unnecessary for the respondents to cancel the GST Registration and they could have considered any other penalty which is more proportionate to the violation of law. 28. In Arnab Ranjan Goswami v. Union of ....
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....ence of the Court to find an extreme penalty of the nature of cancellation of GST Registration being imposed on a business on the basis of a "prima facie" investigation conducted by the respondents. 33. In Jayrajbhai Jayantibhai Patel v. Anilbhai Nathubhai Patel (2006) 8 SCC 200, at page 208, the Supreme Court held: " ... the power of judicial review may not be exercised unless the administrative decision is illogical or suffers from procedural impropriety or it shocks the conscience of the court in the sense that it is in defiance of logic or moral standards but no standardised formula, universally applicable to all cases, can be evolved. Each case has to be considered on its own facts, depending upon the authority that exercises the po....