M/S Goyal Trading Co vs. Union Of INDIA

Held

The Court held that while the Indore Bench has territorial jurisdiction due to the petitioner's business operations and the search conducted in Indore, the writ petition is not maintainable due to the availability of an efficacious statutory remedy of appeal. The Court noted that writ petitions are maintainable in exceptional circumstances like lack of jurisdiction or violation of natural justice, but 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 found that the appellate authority is competent to examine the issue of prejudice caused by not allowing cross-examination and to decide all grounds raised. Citing the Supreme Court's decision in State of Maharashtra & Others v/s Greatship (India) Limited, the Court emphasized that judicial prudence dictates refraining from exercising writ jurisdiction when an alternate statutory remedy exists, especially when there are factual disputes. The Court found that the High Court had erred in entertaining the writ petition and should have relegated the petitioner to the statutory appeal process. Therefore, all 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 dated 19.12.2024 passed by the Additional Commissioner, Central Goods & Service Tax, Bhopal. This order pertained to tax periods 2017-18 and 2018-19 and imposed recovery of Input Tax Credit (ITC), interest, and penalty. The challenge stemmed from an investigation by DGGI, Bhopal Unit, into M/s R.A. Enterprises for allegedly availing fake/bogus ITC amounting to Rs 1,39,03,814/- and passing it on to recipients. 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, instead of filing an appeal under Section 107 of the CGST Act, approached the High Court alleging violation of natural justice.

Key Issues

1. Whether the writ petition is maintainable before the Indore Bench of the High Court, considering the petitioner's registration and place of business are in Indore, despite the assessing authority being in Bhopal? (Question of jurisdiction) 2. Whether the writ petition is maintainable in light of 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, citing several High Court and Supreme Court judgments, including Bharat Mint & Allied Chemicals, Andaman Timber Industries, and Titan Company Limited, to argue that a writ petition can be entertained against an order in original, especially when principles of natural justice are violated. They argued that the order in original was passed in gross violation of natural justice as they were denied the opportunity to cross-examine witnesses and their submissions were not considered. They also argued that a common notice was issued for different financial years. The petitioners asserted that the Indore Bench has jurisdiction as their business operations and the search were conducted in Indore. 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 condition for appeal. 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 to support their contention that statutory remedies must be exhausted.