M/S Siddharth Metals Through Its Proprietor Mr. Siddharth Jain vs. The Assistant Commissioner Of State Tax

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 Court found that the High Court had erred in entertaining a writ petition against an assessment order when a statutory remedy of appeal was available. The Court reasoned that judicial prudence demands refraining from exercising jurisdiction under constitutional provisions when an alternate remedy exists, especially when there are disputes on facts and no valid reasons are shown to bypass the statutory appeal. The petitioner was relegated to avail the statutory remedy of appeal under Section 107 of the SGST Act. The Court explicitly stated that it had not expressed any opinion on the merits of the case. The writ petition was dismissed with liberty to approach the Appellate Authority.

Facts

The petitioner, M/s Siddharth Metals, engaged in trading iron and steel products, filed a writ petition challenging an Order-in-Original dated 06.06.2025 passed by the Assistant Commissioner of State Tax. The order imposed a total demand of Rs. 1,79,39,325/- (Tax, Interest, and Penalty) for wrongly availing Input Tax Credit (ITC) for Financial Years 2019-20, 2021-22, and 2022-23. The Department's contention was that the petitioner was ineligible for ITC because their supplier's registration was cancelled retrospectively. A show-cause notice was issued on 15.04.2025, to which the petitioner replied on 15.05.2025. Instead of filing an appeal under Section 107 of the SGST Act, the petitioner approached the High Court directly.

Key Issues

1. Whether the writ petition is maintainable under Article 226 of the Constitution of India against the Order-in-Original when an alternative efficacious remedy of appeal under Section 107 of the SGST Act is available? (Question of law) Petitioner's Arguments: - The respondent wrongly issued a show-cause notice for multiple financial years, which is impermissible under the SGST Act/Rules. - Even if the supplier's registration was cancelled retrospectively, the petitioner cannot be held ineligible to avail ITC. Respondent's Arguments: - The petitioner has an alternative efficacious remedy by way of appeal, making the writ petition not maintainable. - The petitioner filed a reply on merits, and the Competent Authority passed the Order-in-Original. Bypassing the remedy of appeal solely on the ground of depositing 10% of the demand is not permissible.