Ultratech Cement Limited vs. Union Of INDIA

Held

The Court held that the writ petition is not maintainable. The primary reason for this decision was the existence of an alternative and efficacious statutory remedy of appeal available to the petitioner under Section 107 of the GST Act. The Court referred to Supreme Court judgments, specifically 'The State of Madhya Pradesh and Another vs M/s Commercial Engineers and Body Building Company Ltd' and 'Assistant Commissioner and others vs. Commercial Steel Limited', which clearly state that High Courts should generally relegate parties to statutory appeal mechanisms when available. The Court noted that the petitioner had not established any exceptional circumstances, such as a breach of fundamental rights, violation of principles of natural justice, or excess of jurisdiction, that would warrant bypassing the appellate route. Therefore, the Court did not delve into the merits of the case concerning the GST liability on the Development Cess and Environment Cess. The operative direction was to dismiss the writ petition and allow the petitioner to pursue their grievance before the appellate authority under Section 107 of the GST Act. The Court clarified that if the petitioner files an appeal within 30 days of receiving the order, the appellate authority shall not raise a plea of limitation and will decide the appeal on its merits, without being influenced by any observations made by the High Court.

Facts

The petitioner, Ultratech Cement Limited, filed a writ petition challenging an order dated September 26, 2023, by the Additional Commissioner (CGST and Central Excise), Raipur. This order confirmed a demand of Rs. 14,35,54,944/- (CGST and SGST) along with interest and penalty, on Development Cess and Environment Cess paid under the Chhattisgarh (Adhosanrachna Vikas evam Paryavaran) Upkar Adhiniyam, 2005. The petitioner also challenged a subsequent demand notice dated December 6, 2023, from the Assistant Commissioner for the same amount. The petitioner pays royalty, surface rent, dead rent, and water charges for its limestone mines, as well as charges for DMF and NMET. The Chhattisgarh Cess Act levies cess on land for infrastructure and environment projects, with a prescribed rate on dispatched minerals. The petitioner has paid Rs. 79,75,27,468/- towards these cesses from July 2017 to September 2021. Proceedings were initiated following an inspection under Section 67(1) of the CGST Act, leading to allegations of CGST evasion due to non-payment of GST on the aforementioned cesses under the reverse charge mechanism.

Key Issues

1. Whether the writ petition is maintainable before this Court, given the existence of an alternative efficacious statutory remedy of appeal under Section 107 of the GST Act? Petitioner's Arguments: The petitioner contended that the writ petition is maintainable because the Additional Commissioner, in passing the impugned order, allegedly exceeded jurisdiction and violated principles of natural justice. They argued that the nexus of imposing GST liability on the Cess was legally flawed and that the circulars relied upon by the revenue were not applicable. The petitioner also sought to argue that the appellate authority would be bound by certain circulars, making the alternative remedy less effective. Revenue's Arguments: The respondents argued that the petitioner has a clear and efficacious alternative remedy of appeal under Section 107 of the CGST Act. They relied on Supreme Court judgments in cases like 'The State of Madhya Pradesh and Another vs M/s Commercial Engineers and Body Building Company Ltd' and 'Assistant Commissioner and others vs. Commercial Steel Limited', which emphasize that High Courts should not entertain writ petitions when a statutory appeal mechanism is available, unless exceptional circumstances like breach of fundamental rights, violation of principles of natural justice, excess of jurisdiction, or challenge to the vires of a statute are established. The respondents asserted that none of these exceptions were met in the present case.