M/s. M.N. Trading Co. v. The Union of India

1. Heard learned counsel for the parties.

2. The Petitioner challenges the order of cancellation of its registration under the Central Goods and Services Tax Act, 2017 issued on 8 June 2022.

3. This Petition was instituted only on 12 January 2024. Within the prescribed period of limitation, the Petitioner neither sought for revocation of the cancellation order nor appealed against the same.

4. The learned counsel for the Petitioner refers to certain difficulties faced by the Petitioner due to domestic reasons and states that the non-filing of an appeal or an application for revocation within the prescribed period of limitation ought not to come in the Petitioner’s way because the Petitioner was now alleging breach of natural justice.

5. The learned counsel pointed out that the show cause notice dated 27 May 2022 had nowhere alleged that the cancellation of registration was proposed with any retrospective effect. However, he pointed out that by the impugned order dated 8 June 2022, the GST registration has been cancelled w.e.f. 4 August 2017, i.e. from the date of its receipt. He relied on the decision of the Delhi High Court in the case of Aditya Polymers Vs. Commissioner of Delhi Goods and Services Tax and Another[1] to submit that such retrospective cancellation, without any opportunity to the Petitioner to show cause, would be vulnerable.

6. The learned counsel for the Respondent submitted that the Petitioner, despite receipt of a show cause notice, did not even bother to file any reply. Even after the impugned order was made on 8 June 2022, the Petitioner did not bother to apply for revocation or appeal such order. He submitted that under such circumstances, the Petitioner cannot plead any breach of natural justice.

7. The learned counsel for the Respondent relied on the Assistant Commissioner (CT) LTU, Kakinada & Ors. vs. M/s. Glaxo Smith Kline Consumer Health Care Limited[2] to submit that where a complete mechanism is provided under the Act for challenging orders, that mechanism alone must be 2023-VIL-292-DEL 2020 (19) SCC 681 followed and a writ petition should not be entertained to defeat the statutory scheme.

8. We have considered the rival submissions. We are satisfied that this is not a fit case for entertaining this Petition.

9. Firstly, the Petitioner did not even bother to reply to the show cause notice, which is an undisputed position.

10. Secondly, even after the impugned order was made, the Petitioner did not, within the prescribed period of limitation or even otherwise, apply for revocation or appeal the cancellation order. Only after considerable delay, which also has not been explained, has the Petitioner instituted this Petition, bypassing the alternate statutory remedies available.

11. In the case of Glaxo Smith Kline (supra), the Assessee had instituted an Appeal to challenge the impugned order. However, this Appeal was instituted even after the condonable period prescribed under the statute. Upon dismissal of the Appeal, the Petitioner invoked the remedy under Article 226 of the Constitution of India. This was not allowed by the Hon’ble Supreme Court.

12. The Hon’ble Supreme Court held that where the right or liability is created by a statute, which gives a special remedy for enforcing it, the remedy provided by that statute must only be availed of. Though an Act cannot bar and curtail remedies under Article 226 or 32 of the Constitution, the constitutional Court would certainly take note of the legislative intent manifested in the provisions of the Act and would exercise its jurisdiction consistent with the provisions of the enactment. To put it differently, the fact that the High Court has wide jurisdiction under Article 226 of the Constitution does not mean that it can disregard the substantive provisions of a statute and pass orders which can be settled only through a mechanism prescribed by the statute.

13. The Court held that the powers under Article 226 of the Constitution of India are wide, but certainly not wider than the plenary powers bestowed on the Supreme Court under Article 142 of the Constitution. Even while exercising the powers under Article 142 of the Constitution, the Hon’ble Supreme Court is required to bear in mind the legislative intent and not to render the statutory provisions otiose. This is something that even the Supreme Court cannot do in exercise of its plenary powers under Article 142 of the Constitution. It is thus unfathomable as to how the High Court can take a different approach in the matter in reference to Article 226 of the Constitution. The principle underlying the rejection of such argument by the Supreme Court would apply on all scores to the exercise of power by the High Court under Article 226 of the Constitution of India.

14. The Hon’ble Supreme Court has also held that the High Court is certainly not free to entertain the writ petition assailing the assessment order if filed beyond the statutory period of maximum 60 days in filing appeal. A similar view is expressed by the Supreme Court in its decision in the case of ONGC v. Gujarat Energy Transmission Corporation Ltd.[3] as also by the Co-ordinate Bench of this Court in Abhuydaya Cooperative Bank Ltd. v. Union of India through Joint Secretary and Ors.[4] where the Courts were dealing with the issue of statutory appeal filed beyond the stipulated period and condoning the delay after such prescribed maximum time limit under the statute.

15. In this case, the show cause notice of 27 May 2025 had given the petitioner a clear idea of why the registration was sought to be cancelled. The reason was that the Petitioner was alleged to be issuing invoices or bills without the supply of goods and/or services, leading to wrongful availment or utilisation of input for the refund of tax. Considering the nature of the allegation, the argument that the Petitioner did not expect the registration to be cancelled from the date of its receipt cannot be accepted.