The Supreme Court while allowing the appeal of the revenue ruled that the Writ petition in High Court is not maintainable if statutory alternative remedy is available under CGST Act.
The respondent, M/s Commercial Steel Ltd. is a proprietary concern engaged in the business of iron and steel and is registered under the Central Goods and Services Tax Act 2017 and has been allotted a GST code. The respondent purchased certain goods from a dealer, JSW Steel Limited under a tax invoice. The consignment of goods was being carried in a truck. While it was proceeding from the State of Karnataka, it was intercepted on 12 December 2019 at 5.30 pm at Jeedimetala. The tax invoice indicated that the goods were earmarked for delivery at Balanagar, Telangana. The case of the appellants is that Balanagar is situated between the State of Karnataka and Jeedimetala and that no reasonable person would cross Balanagar and then turn around to go back to the place of destination. The purchase value of the goods appeared to be in the amount of Rs 11,14, 579 from the tax invoices.
The Telangana High Court in the exercise of its writ jurisdiction under Article 226 of the Constitution set aside the action of the appellants in collecting an amount of Rs 4,16,447 from the respondent towards tax and penalty under the Central Goods and Services Tax Act 2017 (CGST) and State Goods and Services Tax Act (SGST) and directed a refund together with interest at the rate of 6% per annum from 13 December 2019. A further direction has been issued to the State of Telangana to consider initiating disciplinary proceedings against the Assistant Commissioner.
The three judge bench of Justice D.Y.Chandrachud, Justice Vikram Nath and Justice Hima Kholi while setting aside the high court’s order ruled that the assessee-respondent had a statutory remedy under Section 107 of the CGST Act. Instead of availing of the remedy, the respondent instituted a petition under Article 226. Although the existence of an alternate remedy is not an absolute bar to the maintainability of a writ petition under Article 226 of the Constitution, a writ petition can be entertained in certain exceptional circumstances.
The bench noted that in the present case, none of those exceptions was established further, there was no violation of the principles of natural justice since a notice was served on the person in charge of the conveyance. In this backdrop, it was not appropriate for the High Court to entertain a writ petition. The assessment of facts would have to be carried out by the appellate authority.
However, the Apex court said that this shall not preclude the respondent from taking recourse to appropriate remedies which are available in terms of Section 107 to pursue the grievance in regard to the action adopted by the state in the present case.
The Apex Court has heard Advocate Prashant Tyagi on behalf of the petitioner and Advocate Shaik Mohamad Hanif for the respondent.
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