Writ petition shall not be entertained when statutory alternate remedy is available: SC

Writ petition shall not be entertained when statutory alternate remedy is available: SC The Assistant Commissioner of State Tax and Others v/s M/s Commercial Steel Limited(Supreme Court of India); Civil Appeal No 5121 of 2021; 03.09.2021

Issue

The appeal arises before the Supreme Court of India against the judgement of High Court of Telangana dated 4 march 2020.

Facts in Issue

• The respondent is engaged in the business of iron and steel and is registered under the Central Goods and Services Tax Act 2017 and has been allotted a GST code. The respondent purchased certain goods from a dealer, JSW Steel Limited, Vidyanagar, Karnataka, under a tax invoice dated 11 December 2019.
• The consignment of goods was being carried in a truck bearing registration No KA 35 C 0141. While it was proceeding from the State of Karnataka, it was intercepted on 12 December 2019 at 5.30 pm at Jeedimetala. The tax invoice indicated that the goods were earmarked for delivery at Balanagar, Telangana.
• Appellant stated that Balanagar is situated between the State of Karnataka and Jeedimetala and that no reasonable person would cross Balanagar and then turn around to go back to the place of destination. The purchase value of the goods appeared to be in the amount of Rs 11,14, 579 from the tax invoices.
• Appellant also said that it was likely to be inter-state sale further added that the respondent was attempting to sell the goods in the local market by evading SGST and CGST.
• Therefore, the appellant who is the Assistant Commissioner of state tax and others issued an order of detention in Form GST MOV-06 on 12 December 2019 and a notice was served on the person in charge of the conveyance. The respondent paid the tax and penalty, following which the goods and the conveyance were released on 13 December 2019.
• The respondent instituted writ proceedings under Article 226 of the Constitution before the High Court in order to challenge the order of detention dated 12 December 2019 and the notice which was issued under Section 20 of the IGST Act 2017. A refund of tax was sought. A counter affidavit was filed on behalf of the appellants before the High Court.
• The High Court observed that a mere possibility of a local sale would not provide the officials to take such an action and there was no material to indicate that an attempt was made by the respondent to deliver the goods at a different place and to sell them in the local market evading CGST and SGST. The High Court has also come to the conclusion that since the vehicle was being driven from Karnataka by the local driver from that State, “it is perfectly possible for the driver to lose his way on account of being unfamiliar with the roads” in Hyderabad and bypass Balanagar to proceed to Jeedimetala.

Observations

Appellant: stated that that the High Court was in error in entertaining the writ petition under Article 226 of the Constitution, having regard to the statutory alternative remedy which is available under Section 107 of the CGST Act. The High Court has proceeded on the basis of surmises. Respondent: stated the High Court having entertained the writ petition, it was justified on merits in setting aside the detention and the order by which the tax and penalty was collected under duress. Hence, it is urged that no interference of this Court is warranted. The respondent had a statutory remedy under section 107. Instead of availing of the remedy, the respondent instituted a petition under Article 226. The existence of an alternate remedy is not an absolute bar to the maintainability of a writ petition under Article 226 of the Constitution. But a writ petition can be entertained in exceptional circumstances where there is:

(i) a breach of fundamental rights;

(ii) a violation of the principles of natural justice;

(iii) an excess of jurisdiction; or

(iv) a challenge to the vires of the statute or delegated legislation.

Judgement

The Supreme Court held that the appeal is allowed and the impuged order of High Court is set aside. However, this shall not preclude the respondent from taking recourse to appropriate remedies which are available in terms of Section 107 of the CGST Act to pursue the grievance in regard to the action which has been adopted by the state in the present case. To Read the Judgment Download PDF Given Below :