M/S Shree Bhagwati Steels vs. Union Of INDIA

Held

The Court held that the writ petition was not maintainable in the first instance. The reasoning was based on the explicit provision of an alternative statutory remedy under Section 107 of the CGST Act, 2017, which allows any person aggrieved by a decision or order passed by an adjudicating authority to appeal to the prescribed Appellate Authority within three months. The Court found no reason to bypass this established legal procedure. Consequently, the Court dismissed the writ petition, granting the petitioner liberty to raise all their legal and factual grounds before the appellate authority. The Court further directed that the time spent by the petitioner in pursuing the writ petition before the High Court would be excluded by the Appellate Authority when calculating the limitation period for entertaining the appeal, provided the appeal is filed within 30 days from the date of this order. This decision is based on the principle that statutory remedies must generally be exhausted before approaching the writ jurisdiction of the High Court.

Facts

The petitioner, M/s Shree Bhagwati Steels, filed a writ petition challenging an Order-in-Original dated January 30, 2025, and a consequential summary order dated February 1, 2025, passed by the Superintendent, GST Range-X, Jaipur. These orders imposed a demand of Rs. 7,00,823/- (CGST + SGST) along with interest and an equivalent penalty of Rs. 7,00,823/-. The demand was raised for the alleged wrongful availment and utilization of fraudulent Input Tax Credit (ITC) by the petitioner under the CGST Act, 2017. The respondents, including the Union of India and various GST authorities, objected to the maintainability of the writ petition, citing the availability of an alternative statutory remedy.

Key Issues

1. Whether the writ petition is maintainable before this Court, given the availability of an alternative statutory remedy under Section 107 of the CGST Act, 2017? The petitioner's contention, though not explicitly detailed in the judgment, is implied by their filing of a writ petition, suggesting a belief that the alternative remedy was either inadequate or that exceptional circumstances warranted direct High Court intervention. The respondents, on the other hand, argued that the writ petition was not maintainable as the petitioner had not availed the statutory remedy of appeal provided under Section 107 of the CGST Act, 2017, before the Appellate Authority. They relied on the existence of this statutory mechanism as the appropriate recourse for aggrieved persons.