Atharvan Minerals PVT LTD vs. Union Of INDIA Thr Its Secretry Ministry Of Finance And Ors

Held

The Court held that the Petitioner had an admitted alternative remedy under Section 107 of the CGST Act. The circumstance that the statute requires a pre-deposit for instituting an appeal cannot be a ground to bypass the statutory remedy. The Court rejected the Petitioner's argument that the petition involved only a pure question of law, stating that it would involve factual aspects. The Court found that the Petitioner was taking a chance by instituting the writ petition to avoid the pre-deposit requirement. Citing precedents like Kotak Mahindra Bank Pvt Ltd v. Ambuj A Kasliwal and Others and Assistant Commissioner (CT) LTU, Kakinada & Ors vs. M/s. Glaxo Smith Kline Consumer Health Care Limited, the Court emphasized that the extraordinary jurisdiction under Article 226 cannot be exercised to evade statutory pre-deposit requirements. The Court dismissed the petition, leaving it open for the Petitioner to avail of alternate remedies under the CGST Act, and explicitly stated that the merits of the matter were not considered.

Facts

The Petitioner, Atharvan Minerals Pvt Ltd, filed a writ petition before the Bombay High Court challenging an order dated 30 May 2024 passed by the Joint Commissioner of CGST and Central Excise. The Petitioner admitted that the impugned order was appealable under Section 107 of the CGST Act. However, they sought to bypass the statutory remedy, citing the pre-deposit requirement for appeal and the insolvency of Respondent No. 7. The Petitioner had already deposited Rs two crores on 3 December 2021, while the demand, excluding interest and penalty, was Rs 38.97 Crores. The Court noted that the Petitioner was essentially attempting to avoid the pre-deposit requirement and stall adjudication.

Key Issues

1. Whether the Petitioner has an efficacious alternative remedy against the impugned order under the CGST Act, and if so, whether the High Court should exercise its writ jurisdiction under Article 226 of the Constitution to bypass this remedy, particularly when the Petitioner seeks to avoid the statutory pre-deposit requirement. Petitioner's contention: The Petitioner argued that they had no alternative, much less an efficacious remedy, because Respondent No. 7 had been admitted into insolvency, making further adjudication unnecessary. They also contended that the petition involved a pure question of law and relied on the decision in Godrej Sara Lee Ltd. v. Excise & Taxation Officer-cum-Assessing Authority & Ors. to support bypassing the alternate remedy. Respondents' contention: The Respondents did not explicitly record arguments in the judgment regarding the Petitioner's contentions on bypassing the remedy. However, the Court's reasoning implicitly addresses the revenue's position by upholding the statutory remedy and the pre-deposit requirement.