HC Declines Writ on Classification Dispute, Relegates Assessee to Statutory Appeal.

Issue

Whether a writ petition under Article 226 of the Constitution is maintainable to challenge a GST assessment order that involves a disputed classification of goods, or whether the assessee must first exhaust the efficacious statutory appellate remedy available under Section 107 of the CGST Act.

Facts

The petitioner, a manufacturer of toilet and floor cleaners, classified its products under HSN 3808, attracting 18% GST.
The GST department contended that the products should be classified under HSN 3402, attracting a 28% GST rate.
An initial order was quashed and remanded. On remand, the assessing authority passed a fresh assessment order, re-confirming the department’s position and the higher tax demand.
The petitioner, instead of filing a statutory appeal under Section 107 against this new order, directly filed a writ petition in the High Court.
The Revenue argued that the writ was not maintainable as the petitioner had an efficacious alternate remedy (a statutory appeal) available to them.

Decision

The High Court dismissed the writ petition, ruling in favour of the Revenue on the point of maintainability.
It held that the petitioner must first pursue the efficacious alternate remedy of a statutory appeal under Section 107.
The court observed that a classification dispute is a mixed question of fact and law that is not amenable to adjudication under Article 226 (writ jurisdiction), especially when the appellate authority has not yet had a chance to examine the merits.
The petitioner was given the liberty to file the statutory appeal, and the merits of the classification dispute were left open to be decided by the appellate authority.

Key Takeaways

Rule of Alternate Remedy: This judgment is a strong affirmation of the “Rule of Alternate Remedy.” A High Court will generally not entertain a writ petition if a specific, effective, and adequate statutory remedy (like an appeal) is available to the taxpayer.
Writ Court is Not for Classification Disputes: A dispute over HSN classification is a technical, factual matter. The High Court will not step into the shoes of the assessing or appellate authorities to act as the primary fact-finding body.
Statutory Hierarchy Must Be Respected: Taxpayers cannot bypass the statutory appellate hierarchy (Assessing Officer -> Appellate Commissioner -> Tribunal) to seek a shortcut via a writ petition on a merit-based dispute.

HIGH COURT OF CALCUTTA

Ashok Ghosh

State of West Bengal^*

Biswajit Basu and Ajay Kumar Gupta, JJ.

MAT No. 82 of 2025
CAN NOS. 1 AND 2 of 2025

NOVEMBER 4, 2025

Boudhayan Bhattacharyya, Ms. Stuti Bansal and Ms. Keya Kundu for the Petitioner. Pretom Das and Ms. Rima Sarkar for the Respondent.

ORDER

1. Affidavit of service filed on behalf of the appellant be kept with the record.

1.1. This intra-court appeal is directed against the order dated August 19, 2024 passed in WPA 1603 of 2024 whereby the learned Single Judge has dismissed the writ petition.

2. The appellant runs his business under the name and style of M/s. Ashok Ghosh, he was served with a pre-show cause notice under Section 73(5) of the Central Goods and Services Tax Act 2017 (hereinafter referred to as „the said Act of 2017′ in short) followed by an order under Section 74 thereof dated May 19, 2022 of the Adjudicating Authority i.e., the Assistant Commissioner of Revenue, State Tax Bureau of Investigation (North Bengal) Alipurduar Zone.

3. The petitioner, aggrieved by the said order of the adjudicating authority, had preferred an appeal under Section 107(1) of the said Act of 2017 with a prayer for condonation of delay.

4. The Senior Joint Commissioner of Revenue, Jalpaiguri Circle, the respondent no.3 herein being the appellate authority by an order dated April 30, 2024 had dismissed the said appeal holding that the said appeal has been filed beyond the maximum period prescribed under Section 107 of the said Act of 2017.

5. The order of the Appellate Authority was under challenge in the writ petition. The Learned Single Judge had dismissed the said writ petition holding that there is no scope to condone the delay in preferring the appeal beyond four months and the said issue has been settled by the following judgments of the Hon?ble Supreme Court viz. Singh Enterprises v. CCE [2008] 12 STT 21 (SC) and CC & CE v. Hongo India (P.) Ltd. (2009) 5 SCC 791. The learned Single Judge has further held that the operation of the unreported judgment of the Hon?ble Division Bench of this Court in the case of S. K. Chakraborty & Sons v. UOI GSTL 328 (Calcutta) passed in M.A.T. 81 of 2022 on which the learned advocate for writ petitioner placed reliance since has been stayed by the Hon’ble Supreme Court, is of no help of the writ petitioner.

6. Mr. Boudhayan Bhattacharyya, the learned Advocate for the appellant submits that the decisions of Singh Enterprises (supra) and Hongo India (P.) Ltd. (supra) are on the Central Excise Act, 1944 as such are not applicable in the present case.

7. He submits that in the decision of S. K. Chakraborty & Sons (supra), it has been held that the Section 107 of the said Act of 2017 is directory in nature not mandatory, the effect of the said judgment is not diluted by the order of the Hon’ble Supreme Court staying the operation of it. In support of such contention, reliance is placed on another decision of the Hon’ble Division Bench of this Court in the case of Pijush Kanti Chowdhury v. State of West Bengal 2007 (3) CHN 178.

8. He further submits that the Hon’ble Division Bench of this Court in the case of Ram Kumar Sinhal v. State of West Bengal (Calcutta), even after taking into consideration the said order of stay, has held that Section 107(4) of the said Act of 2017 is not mandatory but directory. Therefore, according to Mr. Bhattacharyya, the Appellate Authority was not justified in refusing to condone the delay in filing of the said appeal.

9. Ms. Sarkar, learned Advocate for the State submits that the proposition of law is clear from the judgments cited on behalf of the appellant, nonetheless the decision of S. K. Chakraborty & Sons (supra) is still under challenge before the Hon’ble Supreme Court.

Heard learned Advocate for the parties.

10. The decisions of Singh Enterprises (supra) and Hongo India (P.) Ltd. (supra) are on the Central Excise Act, 1944, a completely different Act, as such the proposition of law laid down in the said two decisions is no pointer to the issue under consideration.

11. The Hon’ble Division Bench of this Court in the case of S. K. Chakraborty & Sons (supra) has held that the time to file an appeal prescribed under Section 107(4) of the said Act of 2017 is not mandatory but directory in nature. The said decision though is under challenge before the Hon’ble Supreme Court and an order staying the operation of the said judgment has been passed nonetheless another Hon’ble Division Bench of this Court in the case of Ram Kumar Sinhal (supra), even after taking note of the said order of stay, has held that the proposition of law laid down in the said decision of S. K. Chakraborty & Sons (supra) is correct, the paragraphs 31 and 32 of the said report are quoted below for ready reference:

“31. In S.K. Chakraborty (supra), S.K. Chakraborty & Sons (supra) the Co-ordinate Bench of this Court categorically observed that the timelines stipulated in Section 107(4) of the WBGST Act are not mandatory and the provisions of the Limitation Act are applicable.

32. The mere fact that an order of stay has been passed in respect of the said judgment does not take away the value of the same as a precedent. The operation of the order between the parties therein has been stayed, but the ratio therein is binding on co-ordinate Benches as per the Law of Precedents.”

12. The Hon’ble Division Bench of this Court in the case of Pijush Kanti Chowdhury (supra) has held that the stay in a pending appeal before the Apex Court does not amount to any declaration of law but is only binding upon the parties to the proceedings. Paragraph 13 of the said judgment is quoted below for ready reference: –

“13. Therefore, the effect of the order of stay in a pending appeal before the Apex Court does not amount to ‘any declaration of law’ but is only binding upon the parties to the said proceedings and at the same time, such interim order does not destroy the binding effect of the judgment of the High Court as a precedent because while granting the interim order, the Apex Court had no occasion to law down any proposition of law inconsistent with the one declared by the High Court which is impugned.”

13. Having considered the aforesaid judgments and the materials-on-record, we are of the opinion that the Appellate Authority, in appropriate cases, has the power to condone the delay in filing the appeal beyond the time prescribed under Section 107(4) of the said Act of 2017, subject to proper explanation being offered.

For the reasons discussed above, the order impugned consequently the order of the Appellate Authority dated April 30, 2024 are set aside.

The Appellate Authority is directed to re-consider the prayer of the appellant for condonation of delay after giving the parties opportunity to bring the materials on record in support of their respective cases.

MAT 82 of 2025 and the connected applications thereto being CAN 1 of 2025 and CAN 2 of 2025 are disposed of without any order as to costs.

Parties to act on the server copy of this judgment duly downloaded from the official website of this Court.

Urgent Photostat certified copy of this judgment, if applied for, be supplied to the parties, subject to compliance of all requisite formalities.

I agree.