The Madhya Pradesh High Court has held that taxpayers must avail the statutory appellate remedy before the GST Appellate Tribunal (GSTAT) once the Tribunal becomes functional, and cannot continue to pursue writ proceedings merely because the petition was filed at a time when the Tribunal had not been constituted. A Division Bench comprising Justice Vivek Rusia and Justice Pradeep Mittal dismissed the writ petition filed by SNS Minerals Private Limited while granting liberty to approach the GST Appellate Tribunal.

The dispute arose after SNS Minerals, engaged in mining and supply of limestone, claimed a refund of Rs.84.26 lakh under Section 54(3) of the CGST Act. The company had paid GST at 18% on royalty under the reverse charge mechanism between April 2018 and December 2018, while its outward supplies attracted GST at 5%, leading to accumulation of excess input tax. Although the refund claim was initially rejected, the Appellate Authority later allowed the appeal, following which the refund was sanctioned and disbursed.

Subsequently, the department initiated review proceedings, challenged the refund sanction order and succeeded before the appellate authority, which set aside the refund granted to the assessee. Aggrieved by this reversal, the company approached the High Court contending that the earlier appellate order had attained finality and that the authority could not indirectly revisit its own decision through a subsequent appeal.

The petitioner argued that the department had never challenged the favourable appellate order before a higher forum and, therefore, the issue stood concluded. It was also submitted that the appellate authority had effectively reviewed its own earlier order, an exercise not permitted under law.

The Revenue, however, maintained that the refund sanction order was independently appealable and that the department was entitled to challenge an erroneous refund that was prejudicial to the interests of revenue. It further contended that the petitioner had participated in the subsequent proceedings and could not bypass the statutory remedy available under the GST law.

The High Court noted that the writ petition had been entertained in 2023 only because the GST Appellate Tribunal was not operational at that time. However, with the constitution of the Tribunal and appointment of its Presiding Officers, the statutory forum had become available for adjudication of such disputes.

Relying on the Supreme Court decisions in Whirlpool Corporation v. Registrar of Trade Marks and Radha Krishan Industries v. State of Himachal Pradesh, the Court reiterated that where a statute creates a right and provides a specific remedy, parties must ordinarily exhaust that remedy before invoking writ jurisdiction.

The Bench observed that none of the recognised exceptions to the rule of alternate remedy were attracted, as the petitioner had neither alleged violation of natural justice nor challenged the jurisdiction of the authorities or the validity of any statutory provision.

Holding that all legal and factual issues raised by the parties could appropriately be examined by the GST Appellate Tribunal, the Court declined to entertain the writ petition. The Bench dismissed the petition with liberty to the assessee to file an appeal before the GSTAT and directed that the interim protection already granted would continue until the Tribunal decides the stay application.

Thus, the writ petition was dismissed and the parties were relegated to the statutory appellate forum under the GST regime.

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