M/S Raki Avenues vs. The Gove., Of Ap

Held

The Court held that a statutory alternative remedy of appeal is available to the petitioner under Section 107 of the CGST Act, 2017. The Court observed that factual verification is required, which is best undertaken by the appellate authority. Therefore, the High Court was not inclined to entertain the writ petition directly. The petitioner was granted liberty to avail the remedy of appeal before the appellate authority within two weeks from the date of receipt of the order. The Court did not decide on the merits of the petitioner's contentions regarding the penalty or the violation of Article 14.

Facts

The petitioner challenged an order dated 12.03.2020, passed by the Assistant Commissioner (ST)-2nd respondent, specifically concerning the penalty imposed. The petitioner contended that the levy of a 100% penalty was erroneous and contrary to the CGST Act and Rules, as it was imposed in the absence of elements of fraud and suppression as stipulated under Section 74 of the CGST Act. The petitioner also argued that the penalty imposition violated Article 14 of the Constitution of India. The impugned order was passed after a show cause notice was issued and the petitioner submitted an explanation. The judgment notes that an appeal remedy is available to the petitioner under Section 107 of the CGST Act, 2017.

Key Issues

1. Whether the levy of 100% penalty by the Assistant Commissioner (ST) is erroneous and contrary to the CGST Act and Rules, particularly in the absence of fraud and suppression as contemplated under Section 74 of the CGST Act, 2017? 2. Whether the imposition of penalty violates Article 14 of the Constitution of India? The petitioner argued that the 100% penalty was wrongly imposed in the absence of fraud and suppression, citing Section 74 of the CGST Act, and that this violated Article 14 of the Constitution. The revenue's arguments are not recorded in the judgment.