It was not appropriate for the High Court to entertain a writ petition on the basis of surmises. Supreme court set aside the impugned order whereby high court ordered the refund of the amount collected towards tax and penalty together with interest.
Section 107 of the CGST Act, 2017 — Appeal — Maintainability of Writ —The appellant department challenged the judgment dated 4 March 2020 of a Division Bench of the High Court of Telangana. The High Court has set aside the action of the appellants in collecting an amount of Rs. 4,16,447 from the respondent towards tax and penalty and directed a refund together with interest at the rate of 6% per annum from 13 December 2019. A further direction has been issued to the State of Telangana to consider initiating disciplinary proceedings against the Assistant Commissioner. Costs of Rs. 25,000 have been imposed on the first appellant. The respondent vehicle was intercepted on 12 December 2019. The department alleged that in the guise of an inter-State sale, the respondent was attempting to sell the goods in the local market by evading GST. An order of detention was issued 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 appellant department submitted that statutory alternative remedy was available under Section 107 of the Act. The court observed that 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 a breach of fundamental rights; a violation of the principles of natural justice; an excess of jurisdiction; or a challenge to the vires of the statute or delegated legislation. In this case, none of the above exceptions was established. The High Court has while doing this exercise proceeded on the basis of surmises.
Held that—The Hon’ble Supreme Court allowed the appeal and set aside the impugned order of the High Court.
It was not appropriate for the High Court to entertain a writ petition on the basis of surmises. Supreme court set aside the impugned order whereby high court ordered the refund of the amount collected towards tax and penalty together with interest.
Section 107 of the CGST Act, 2017 — Appeal — Maintainability of Writ —The appellant department challenged the judgment dated 4 March 2020 of a Division Bench of the High Court of Telangana. The High Court has set aside the action of the appellants in collecting an amount of Rs. 4,16,447 from the respondent towards tax and penalty and directed a refund together with interest at the rate of 6% per annum from 13 December 2019. A further direction has been issued to the State of Telangana to consider initiating disciplinary proceedings against the Assistant Commissioner. Costs of Rs. 25,000 have been imposed on the first appellant. The respondent vehicle was intercepted on 12 December 2019. The department alleged that in the guise of an inter-State sale, the respondent was attempting to sell the goods in the local market by evading GST. An order of detention was issued 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 appellant department submitted that statutory alternative remedy was available under Section 107 of the Act. The court observed that 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 a breach of fundamental rights; a violation of the principles of natural justice; an excess of jurisdiction; or a challenge to the vires of the statute or delegated legislation. In this case, none of the above exceptions was established. The High Court has while doing this exercise proceeded on the basis of surmises.
Held that—The Hon’ble Supreme Court allowed the appeal and set aside the impugned order of the High Court.