Writ petition not entertained due to Alternative Remedy; Petitioner relegated to Appellate Authority with interim protection

Issue

Whether the High Court should entertain a Writ Petition challenging an adjudication order on the grounds of natural justice violation (non-supply of documents/denial of cross-examination) when an effective statutory remedy of appeal under Section 107 of the GST Act is available.

Facts

The Order: The Additional Commissioner passed an adjudication order confirming a GST demand, imposing an equivalent penalty, and appropriating seized cash.
Petitioner’s Grievance: The petitioner filed a writ petition under Articles 226/227, alleging a breach of principles of natural justice. Specifically, they claimed that relied-upon documents were not supplied and the opportunity for cross-examination was denied.
Alternative Remedy: A statutory appeal under Section 107 lies against the order of the Additional Commissioner, which the petitioner bypassed.

Decision

Relegation to Appeal: The High Court declined to interfere on merits at this stage, citing the existence of an adequate statutory remedy. The Court held that the petitioner should first exhaust the appellate route provided under the Act.
Liberty Granted: The petition was disposed of with liberty to the petitioner to file an appeal under Section 107 within 10 days, along with a stay application.
Interim Protection: To ensure the petitioner is not prejudiced while transitioning to the correct forum, the Court directed that no coercive action shall be taken against the petitioner pursuant to the impugned order until the Appellate Authority considers the stay application.
Independent Adjudication: The Appellate Authority was directed to decide the stay and the appeal expeditiously on merits, uninfluenced by the dismissal of the writ petition.

Key Takeaways

Exhaustion of Remedies: High Courts are increasingly reluctant to entertain Writ Petitions in GST matters if a statutory appeal mechanism exists (Section 107/112), even when natural justice violations are alleged. The preferred route is always the Appellate Authority unless the order is completely without jurisdiction or the alternative remedy is ineffective.

Protective Buffer: When Courts relegate a taxpayer to the appellate forum, they often grant a short window (e.g., 7-10 days) of protection from recovery to allow the taxpayer to file the appeal and stay application without fear of bank attachment.

HIGH COURT OF MADHYA PRADESH

S.S Enterprises

Union of India

VIJAY KUMAR SHUKLA and ALOK AWASTHI, JJ.

WRIT PETITION No. 43262 of 2025

NOVEMBER 21, 2025

Abhinav Malhotra, learned counsel for the Petitioner. Prasanna Prasad, learned counsel for the Respondent.

ORDER

Vijay Kumar Shukla, J. – The present petition is filed under Article 226 and 227 of the Constitution of India challenging the order dated 12.08.2025 passed by the respondent no.2/Additional Commissioner, CGST and Central Excise Commissionerate, whereby demand of GST amounting to Rs. 53,29,13,310/-(Rupees Fifty three Crores, Twenty Nine Lakhs Thirteen Thousand, Three Hundred Ten only) (CGST- Rs.39,10,05,518/- and SGST- Rs. 7,09,53,896/-) and Penalty amounting to Rs. 53,29,13,310/- (Rupees Fifty three Crores Twenty Nine Lakhs, Thirteen Thousand Three Hundred Ten only) has been confirmed against the Petitioner. Further, the Respondent Authority has also directed appropriation of cash of Rs 66,43,130/- seized from the residential premises of the Petitioner.

2. Learned counsel for the respondent raises a preliminary objection that, against the impugned order, there is an alternative and efficacious remedy of appeal under section 107 of the CGST.

3. Learned counsel for the petitioner argued that the alternative bar is not an absolute bar for exercise of the jurisdiction under Article 226 of the Constitution of India, as the Adjudication Officer has not provided the documents and opportunity of cross-examination. In support of his submission, he has placed reliance on the judgment passed by the co-ordinate bench in the case of Paper Trade Links v. UOI (Madhya Pradesh)/WP No.6061/2023 decided on 10.07.2025, where the court has entertained the writ petition.

4. Per contra, learned counsel for the respondent/state supported the impugned order and submitted that the petitioner was given sufficient opportunity to defend and therefore, the aforesaid judgment would not apply. He relied on the various judgments passed by the Apex Court to submit that if an alternative and efficacious remedy is available, then the writ petition cannot be entertained. He referred to the judgments passed by the Apex Court in the Hindustan Coca Cola Beverages (P.) Ltd. v. UOI GSTR 342/48 GST 95/ 308 ELT 433 (SC)/(2014) 15 SCC 44, Hameed Kanju v. Najim (2017) 8 SCC 611, Anshal Housing and Const. v. State of UP (2016) 13 SCC 305, Institute of Hotel Management v. UOI (2017) 11 SCC 72.

5. After hearing learned counsel for the parties and without adverting to the merits of the case, we deem it expedient to dispose of the present petition with liberty to the petitioner to file an appeal before the Appellate Authority within the period of 10 days from today alongwith the application for stay and if the said appeal is filed within the said period, the Appellate Authority shall consider and decide the application for stay as well as appeal expeditiously on merits in accordance with law.

6. Till the application for stay is considered by the Appellate Authority, no coercive action shall be taken against the petitioner in pursuant to the impugned order. If the appeal is not filed within 10 days as directed, the interim order shall automatically come to an end.

7. It is made clear that this Court has not passed any order on the merits of the case, and the Appellate Authority shall not be influenced by the order passed by this Court.

With the aforesaid, the present petition stands disposed of.