The court directed the assessee to file a statutory appeal instead of a writ petition.

The court directed the assessee to file a statutory appeal instead of a writ petition.

Issue

Should a High Court entertain a writ petition against an appealable adjudication order, which includes a dispute over Input Tax Credit (ITC), or should it direct the taxpayer to first exhaust the alternative and effective remedy of filing a statutory appeal?

Facts

• The GST department passed an order raising a total tax demand of ₹1.51 crore against the assessee.
• A part of this demand, amounting to ₹7.07 lakh, was due to the denial of Input Tax Credit (ITC). The ITC was disallowed because the assessee had claimed it on supplies from dealers whose GST registrations were later cancelled. The assessee’s case involved a challenge to the validity of Section 16(2)(c) of the CGST Act.
• Instead of filing a statutory appeal before the appellate authority as provided under the Act, the assessee filed a writ petition directly in the High Court to challenge the order.

Decision

The High Court ruled procedurally in favour of the revenue.

• It held that the order passed by the department was an appealable order, and the assessee ought to have availed the statutory appellate remedy provided under Section 107 of the Act. The court declined to interfere with the order on its merits.
• However, in the interest of justice and to ensure the assessee was not left without a remedy, the court exercised its discretion. It directed that if the assessee files the appeal along with the mandatory pre-deposit by a new, specified deadline (October 31, 2025), the appellate authority should hear the case on its merits and should not dismiss it on the grounds of delay.

Key Takeways

• First Exhaust the Alternative Remedy: It is a well-established legal principle that the extraordinary writ jurisdiction of a High Court should generally not be invoked when an equally effective alternative remedy, such as a statutory appeal, is available to the aggrieved party.
• Appeals are the Designated Path: The GST law provides a clear, structured path for challenging adjudication orders, which starts with an appeal to the first appellate authority. This is the primary and proper route for taxpayers to follow.
• Judicial Discretion Can Provide a Lifeline: While directing the assessee to the proper forum, High Courts often use their discretionary powers to ensure that the taxpayer’s case is not defeated by procedural issues like the expiry of the appeal period. Granting an extended window to file the appeal is a common equitable measure.
• When to File a Writ: A writ petition is generally maintainable against an order only in exceptional circumstances, such as when the order is passed completely without jurisdiction, in gross violation of the principles of natural justice, or when the constitutional validity of a legal provision is the central point of the challenge.