M/S Adama INDIA Private Limited vs. The State Of Madhya Pradesh

Held

The Court held that the writ petition was not maintainable, citing the Supreme Court's decision in State of Maharashtra & Others v/s Greatship (India) Limited. The High Court erred in entertaining the writ petition under Article 226 of the Constitution of India against the order passed under Section 74 of the CGST Act, 2017, by-passing the statutory remedy of appeal. The Court noted that the petitioner's explanations were discarded and were liable to be taken before the appellate authority. The availability of the GST Appellate Tribunal, with appointments of Presiding Officers made, further reinforced the availability of statutory remedies. The Court dismissed the writ petition, relegating the petitioner to avail the statutory remedy of appeal before the appellate authority. The petitioner's prayer to condone the expired limitation period for filing the appeal was rejected, as the High Court could not condone the statutory period of limitation in a writ petition. The Court did not express any opinion on the merits of the case.

Facts

The petitioner, M/s Adama India Private Limited, filed a writ petition challenging an order dated 04.02.2025 passed under Section 74 of the CGST Act, 2017, imposing a penalty of Rs. 5,98,44,867.00. The petitioner argued that Section 74 was wrongly invoked as there was no allegation of fraud, willful misstatement, or suppression of tax to evade tax. They contended that the mistake of paying SGST instead of IGST for the financial year 2017-18 was rectifiable under Section 77 and not a case of willful evasion. The respondents raised a preliminary issue regarding the maintainability of the writ petition due to the availability of an alternative remedy of appeal under Section 107 of the GST Act.

Key Issues

1. Whether the High Court should entertain a writ petition under Article 226 of the Constitution of India against an order passed under Section 74 of the CGST Act, 2017, when an alternative statutory remedy of appeal under Section 107 of the GST Act is available? (Question of law) 2. Whether the invocation of Section 74 of the CGST Act, 2017, is justified in the absence of allegations of fraud, willful misstatement, or suppression of tax to evade tax, especially when the petitioner claims the issue is rectifiable under Section 77? (Question of mixed law and fact) Petitioner's Contentions: - Section 74 of the CGST Act, 2017, was wrongly invoked as there were no allegations of fraud, willful misstatement, or suppression of tax to evade tax. - The mistake of paying SGST instead of IGST for the financial year 2017-18 was rectifiable under Section 77 of the CGST Act, 2017, and not a case of willful evasion. - The issue is liable to be decided in a writ petition under Article 226 of the Constitution of India instead of relegating the petitioner to appeal. Respondents' Contentions: - The petition is not maintainable due to the availability of a remedy of appeal under Section 107 of the GST Act.