M/S Sarvasiddhi Agrotech PVT. LTD vs. Union Of INDIA And Ors

Held

The High Court held that it would not entertain the writ petition on the ground of availability of an alternative statutory remedy. The Court noted that against the impugned order, a statutory appeal is available, and it is well-settled that High Courts should not interfere in writ petitions without the aggrieved party exhausting such remedies, except in exceptional circumstances like lack of jurisdiction or breach of principles of natural justice. The Court found no reason to dismantle the statutory mechanism and allow the petitioner to bypass the appeal route. The Court also observed that the petitioner had raised disputed questions of fact regarding the nature of its activities and the manner of selling rice after 22.09.2017, which are not suitable for examination in a writ petition. The Court acknowledged the petitioner's contention regarding cross-examination but stated that such aspects must be gone into by the appellate authority. The adjudicating authority's order was considered a speaking order. The petition was dismissed, but the petitioner was granted two weeks to file an appeal, which the appellate forum was directed to entertain on merits without raising a question of limitation and without being influenced by the observations in the High Court's order.

Facts

The petitioner, M/s Sarvasiddhi Agrotech Pvt. Ltd., challenged an order in original dated 03.07.2020 passed by the Assistant Commissioner of CGST, Tripura. The CGST officers seized 3204 rice bags from the petitioner's premises on 17.07.2018, alleging evasion of GST. A show-cause notice was issued on 12.03.2019, proposing recovery of unpaid GST on seized rice and sales of packaged marked rice with registered trademark for the period between 22.09.2017 and 17.07.2018. The petitioner contended that GST was not applicable to rice supply until 22.09.2017, and thereafter, only to packaged marked rice with registered trademark, which they claimed not to be engaged in. The petitioner also argued that stock segregation was for internal purposes and that any packaged marked rice was old stock sold prior to 22.09.2017 or returned due to quality disputes, and that sales of such rice had been discontinued after the GST introduction.

Key Issues

1. Whether the High Court should entertain a writ petition challenging an order in original under a taxing statute when an alternative statutory remedy of appeal is available (Section 107 of the CGST Act, 2017)? 2. Whether the petitioner was liable to pay GST on the sale of packaged marked rice with a registered trademark for the period after 22.09.2017? 3. Whether the petitioner's defenses regarding the nature of stock segregation and the status of packaged rice were valid and required examination by the High Court in a writ petition? 4. Whether the denial of cross-examination of witnesses who signed the seizure memo vitiated the order in original? Petitioner's arguments: The petitioner argued that the order in original was bad due to the denial of cross-examination and that the disputed questions of fact regarding their business activities and stock should be examined. They also implicitly argued that the order was erroneous on merits. Revenue's arguments: The respondents contended that a statutory appeal was available and that the High Court should not entertain the writ petition, especially given the disputed questions of fact. They relied on the Supreme Court's decision in Chhabildas Agarwal for the principle of exhausting alternative remedies.