Writ Petition Dismissed Relegating Taxpayer To Appellate Tribunal

Writ Petition Dismissed Relegating Taxpayer To Appellate Tribunal For Factual Adjudication On Nature Of Supply

Issue

Whether a writ petition under Article 226 is maintainable when a taxpayer challenges a first appellate order regarding the factual characterization of a transaction (export of iron ore fines as a supply of goods versus a composite supply) despite the availability of an effective, alternative statutory remedy before the GST Appellate Tribunal under Section 112 of the CGST/OGST Act, 2017.

Facts

The Petitioner is a supplier of goods and services who was initially subjected to a departmental tax audit under Section 65 of the Act.
The audit proceedings culminated in the initiation of adjudication under Section 73, where the original authority raised a demand comprising tax, interest, and penalty.
The Petitioner challenged the assessment order before the First Appellate Authority under Section 107, which subsequently modified the order and reduced the total demand to approximately ₹55.62 lakhs.
Still aggrieved by the sustained demand, the Petitioner chose to bypass the next statutory tier and directly invoked the writ jurisdiction of the High Court to challenge the first appellate order.
The Petitioner contended that the tax authorities erroneously appreciated the nature of the supply, asserting that the export of iron ore fines with an iron (Fe) content above 57% constitutes a standard supply of goods rather than a composite supply.

Decision

The High Court held that an effective and alternative statutory appeal mechanism before the Goods and Services Tax Appellate Tribunal (GSTAT) is expressly available to the petitioner under Section 112 against first appellate orders.
The Court emphasized that the established rule of exhaustion of alternative remedies mandates judicial self-restraint, meaning writ jurisdiction under Article 226 should not be exercised when structured statutory forums exist.
It was observed that determining whether the transaction constitutes a supply of goods or a composite supply involves a detailed adjudication of facts, which falls squarely within the specialized domain of statutory appellate authorities rather than a writ court.
Consequently, because the Petitioner chose to bypass the proper statutory remedy, the High Court declined to entertain the matter and dismissed the writ petition.
The Court granted the Petitioner the liberty to approach and avail themselves of the appropriate legal remedies before the Appellate Tribunal in accordance with the Act and Rules.

Key Takeaways

GSTAT is the Forum for Factual Disputes: Determining the exact nature, classification, or characterization of a supply (such as verifying chemical specifications like Fe content in iron ore) is a deep factual inquiry meant for the Appellate Tribunal, not the High Court.
Strict Adherence to Judicial Discipline: Even if a taxpayer strongly disagrees with a first appellate modification, they cannot skip the secondary statutory appeal tier (Section 112) to seek a direct merits-based review under writ jurisdiction.
Rule of Self-Restraint: The existence of an alternative, efficacious statutory remedy operates as a strong barrier against the maintainability of a writ petition, reinforcing that constitutional remedies cannot be utilized as a substitute for routine tax appeals.
Protection of Statutory Rights: A dismissal of a writ petition on grounds of maintainability does not strip the taxpayer of their substantive defense; they remain legally free to contest all legal and factual points before the competent Appellate Tribunal.

HIGH COURT OF ORISSA

Kai International (P.) Ltd.

Commissioner of CT & GST, Odisha

HARISH TANDON, CJ.
and Murahari Sri Raman, J.

W.P. (C) No. 28003 of 2025

APRIL 16, 2026

Chitta Ranjan Das, Adv. for the Petitioner. Sunil Mishra, Standing Counsel for the Respondent.

ORDER

1. The Petitioner, Supplier of Goods and Services, consequent upon notice for audit under Section 65 of the GST Act read with Section 101 of the Central Goods and Services Tax Act, 2017/the Odisha Goods and Services Tax Act, 2017 (Collectively, “GST Act”), participated in the proceeding. As a consequence of submission of audit report, proceeding under Section 73 of the GST Act was initiated and upon being noticed, the petitioner filed its reply which in the opinion of the adjudicating authority found to be unsatisfactory. A demand of tax, interest and penalty was raised under Section 73 of the GST Act vide order dated 27.08.2024.

1.1. The said adjudication order was carried in appeal on 12.11.2024 under Section 107 of the GST Act, which came to be disposed of vide order dated 10.04.2025 by the Additional Commissioner of State Tax (Appeal), Rourkela whereby the adjudicating order was modified and demand came to be reduced to Rs.55,62,048/-.

1.2. Still aggrieved thereby, said order is assailed in this writ petition on the ground, inter alia, that the Appellate Authority failed to appreciate in proper perspective the classification of nature of supply.

2. Advancing his argument Sri Chitta Ranjan Das, learned Advocate strenuously urged that the activity of export of iron ore fines having Fe contents of more than 57% is purely “supply of goods”, which can at no stretch of imagination be comprehended to mean “composite supply of goods and services”.

3. Such plea has strongly been opposed by the learned Standing Counsel, as the petitioner is not to be allowed to circumvent the alternative remedy available under the GST Act and rules framed thereunder.

4. Since the petitioner has approached this Court by way of filing this writ petition without exhausting effective and efficacious remedy provided under the statute to approach the Goods and Services on Appellate Tribunal under Section 112 of the GST Act to assail order in appeal, this Court is not inclined to entertain this writ petition.

5. On the considered view of this Court, the nature of relief claimed so as to determine whether the transaction of export of iron ore fines is “supply of goods” simpliciter or a composite of supply of goods and services would fall within the domain of fact finding authorities, who are vested with powers to adjudicate both on question of facts as well as question of law.

6. The Hon’ble Supreme Court in Radha Krishan Industries v. State of Himachal Pradesh [2021] 3 SCR 406, held, inter alia, that where an effective alternative remedy is available to the aggrieved person, the High Court ought to restrain itself from exercising power under Article 226 of the Constitution of India and when a right is created by statute, which itself prescribes the remedy or procedure for enforcing the right for liability, resort must be had to that particular statutory remedy before invoking the discretionary remedy under Article 226 of the Constitution of India. It is made clear that this rule of exhaustion of statutory remedies is a rule of policy, convenience and discretion.

7. In view of such enunciation of principles by the Hon’ble Supreme Court of India, this Court desists to entertain this writ petition questioning the legality of the appellate order in order to adjudicate whether the export of iron of fines would be comprehended within the meaning of “supply of goods” or “composite supply of goods and services”. However, liberty is granted to the petitioner, if so advised, to approach appropriate forum as available under the GST Act and Rules framed thereunder.

8. With the aforesaid observation, the writ petition along with the pending Interlocutory Application (s), if any, shall stand dismissed.