M/S Hpcl Mittal Energy Limited vs. Union Of INDIA And Others

Facts

The petitioner, M/s HPCL Mittal Energy Limited, filed a writ petition challenging a show cause notice dated September 22, 2023, and Circular No. 80/54/2018-GST dated December 31, 2018. The core dispute concerns the applicable GST rate, either 5% or 18%, for the supply of LPG for domestic use during the period from July 1, 2017, to January 24, 2018. The petitioner had already filed a reply to the show cause notice. The Court noted a similar case in Mangaluru where the Commissioner, after considering the petitioner's justification and relevant circulars, dropped the proceedings, finding no additional GST liability, interest, or penalties payable. The petitioner sought to prevent coercive action during the pendency of the writ petition.

Held

The Court held that while the petitioner had raised defenses and challenged the GST circular, the existence of an alternate statutory remedy, as emphasized by the Apex Court in State of Maharashtra and others Vs. Greatship (India) Limited, necessitates judicial prudence. The Court noted that the petitioner had already filed a reply to the show cause notice, and in a similar case from Mangaluru, the competent authority had dropped proceedings after considering the circular and the assessee's justification, finding no additional liability. Therefore, the Court decided not to delve into the merits of the challenge to the circular or the GST rate determination at this stage. Instead, it relegated the petitioner to avail their statutory remedies in accordance with the law, leaving the issue regarding the challenge to the circular open for determination in the appellate proceedings. The Court did not decide the substantive issue of the correct GST rate.

Key Issues

1. Whether the High Court should exercise its writ jurisdiction under Article 226 of the Constitution of India to decide the validity of the show cause notice and the GST circular, despite the existence of an alternate statutory remedy? Petitioner's Contention: The petitioner sought to invoke the writ jurisdiction of the High Court to challenge the show cause notice and the GST circular, implying a need for immediate intervention and relief from potential coercive action. Revenue's Contention: The judgment does not explicitly record arguments from the revenue or state. However, the Court's reliance on the principle of alternate remedy suggests that the revenue would likely have argued for the petitioner to pursue the statutory appeal process.