The Assistant Commissioner Of State Tax And Others vs. M/S. Commercial Steel Limited

Held

The Supreme Court held that the High Court erred in entertaining the writ petition under Article 226 of the Constitution. The respondent had a clear statutory alternative remedy available under Section 107 of the CGST Act. The Court reiterated that while the existence of an alternative remedy is not an absolute bar to writ jurisdiction, a writ petition can only be entertained in exceptional circumstances, including breach of fundamental rights, violation of principles of natural justice, excess of jurisdiction, or challenge to the vires of a statute. In this case, none of these exceptions were established. Specifically, there was no violation of the principles of natural justice as a notice was served on the person in charge of the conveyance. Therefore, it was not appropriate for the High Court to entertain the writ petition, and the assessment of facts should have been carried out by the appellate authority. The impugned order of the High Court was set aside, and the writ petition was dismissed, with liberty granted to the respondent to pursue the statutory remedy under Section 107 of the CGST Act.

Facts

The respondent, M/s. Commercial Steel Limited, engaged in the iron and steel business, purchased goods from JSW Steel Limited, Karnataka, under a tax invoice dated December 11, 2019. The consignment was intercepted on December 12, 2019, at Jeedimetala, Telangana. The revenue alleged that the respondent was attempting to sell the goods locally, evading SGST and CGST, by misrepresenting the sale as inter-State. An order of detention and a notice were issued. The respondent paid the tax and penalty of Rs 4,16,447, leading to the release of goods and conveyance on December 13, 2019. The respondent filed a writ petition before the High Court, challenging the detention order and notice, and seeking a refund. The High Court ordered the refund with interest and imposed costs on the appellant.

Key Issues

1. Whether the High Court erred in entertaining a writ petition under Article 226 of the Constitution when an alternative statutory remedy under Section 107 of the CGST Act was available to the respondent? (Question of law) Arguments: Petitioner (Revenue): The High Court should not have entertained the writ petition as the respondent had a statutory alternative remedy under Section 107 of the CGST Act. While not an absolute bar, a writ petition is only maintainable in exceptional circumstances such as breach of fundamental rights, violation of natural justice, excess of jurisdiction, or challenge to the vires of a statute, none of which were established in this case. The High Court's assessment of facts was based on surmises. Respondent: The High Court was justified in entertaining the writ petition and setting aside the detention and collection of tax and penalty, as it was done under duress. Therefore, no interference by this Court is warranted.