M/S Bharat Scrap Through Vijay Kumar Khurana vs. Union Of INDIA

Held

The Court held that the Indore Bench has territorial jurisdiction. Relying on its own Division Bench judgment in Shrigovind Niranjan, the Court stated that if even a small fraction of the cause of action accrues within the Court's jurisdiction, it can entertain the matter. The Court noted that the petitioners have GST registration and a place of business in Indore, and searches were conducted there, thus establishing jurisdiction. Regarding the maintainability of the writ petition, the Court acknowledged that writ petitions are maintainable in cases of lack of jurisdiction, challenge to vires, or total violation of natural justice. However, the Court found that the petitioner's claim of violation of natural justice, specifically the denial of cross-examination, was not substantiated with details of when such a request was made. The Court emphasized that the appellate authority is competent to examine such issues and the relevancy of witness depositions. Citing the Supreme Court's decision in State of Maharashtra & Others v/s Greatship (India) Limited, the Court held that the High Court erred in entertaining the writ petition when an alternate statutory remedy of appeal was available. The Court stated that judicial prudence demands refraining from exercising writ jurisdiction when an effective alternative remedy exists, especially when there are factual disputes and no valid reasons to bypass the statutory appeal. Therefore, the writ petitions were dismissed, with liberty granted to the petitioners to approach the appellate authority.

Facts

The petitioners, including M/s Goyal Trading Co., M/s Royal Enterprises, M/s TNH Mercantile Private Limited, and M/s Bharat Scrap, filed writ petitions challenging an Order in Original (OIO) dated December 19, 2024, passed by the Additional Commissioner, Central Goods & Service Tax, Bhopal. The OIO pertained to tax periods 2017-18 and 2018-19 and imposed recovery of Input Tax Credit (ITC), interest, and penalty. The investigation by DGGI, Bhopal Unit, against M/s R.A. Enterprises alleged availing fake/bogus ITC amounting to Rs 1,39,03,814/-. Show-cause notices were issued under Section 74 and Section 122(1)(ii) of the CGST Act. The petitioners participated in the assessment proceedings but approached the High Court instead of filing an appeal under Section 107 of the CGST Act, alleging violation of natural justice.

Key Issues

1. Whether the writ petition is maintainable before the Indore Bench of the High Court, given that the Order in Original was passed by an authority in Bhopal? (Question of territorial jurisdiction). 2. Whether the writ petition is maintainable despite the availability of an efficacious statutory remedy of appeal under Section 107 of the CGST Act? (Question of maintainability). Petitioner's arguments: The petitioners contended that the writ petition is maintainable because the Order in Original was passed in gross violation of the principles of natural justice, specifically by denying the opportunity to cross-examine witnesses and by issuing a common notice for different financial years. They cited several judgments, including Bharat Mint & Allied Chemicals v/s Commissioner of Commercial Tax and Andaman Timber Industries v/s Commissioner of Central Excise, to support the maintainability of a writ petition against an Order in Original. They also argued that the Indore Bench has jurisdiction as their GST registration and place of business are in Indore, and searches were conducted there. Revenue's arguments: The respondents argued that the writ petition is not maintainable due to the availability of an efficacious statutory remedy of appeal. They contended that the petitioners approached the High Court to avoid the pre-deposit requirement of 10% of the tax under recovery. They relied on Supreme Court judgments in State of Maharashtra & Others v/s Greatship (India) Limited and a Division Bench judgment of the same High Court in Shrigovind Niranjan & Others v/s The State of Madhya Pradesh & Others.