High Court Cannot Entertain Writ Petition Under Article 226 When Statutory Appellate Remedy Under Section 107 CGST Act Is Available: Gujarat High Court

"Mere dissatisfaction with the manner in which the adjudicating authority has dealt with the record cannot, by itself, furnish a ground to bypass the statutory remedy and invoke the extraordinary jurisdiction of this Court under Article 226 of the Constitution." Gujarat High Court held that a writ petition challenging an order passed under Section 130 of the CGST Act is not maintainable when an alternative and efficacious statutory remedy of appeal is available under Section 107 of the CGST Act.

A division bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati observed that the court’s extraordinary jurisdiction under Article 226 cannot be invoked unless the case falls within the narrow exceptions of a violation of fundamental rights, principles of natural justice, jurisdictional error, or a challenge to the vires of the legislation.

Background of the Case

The petitioner, M/s Shreeji Steel, challenged a Show-Cause Notice (SCN) and the subsequent Order-in-Original issued under Section 130 of the CGST Act regarding the confiscation of goods and a conveyance. The tax authorities had initiated proceedings following the interception of a vehicle, alleging that the petitioner was dealing with bogus entities and had evaded tax. After a previous round of litigation where the matter was remanded for fresh consideration, the authorities again passed an order confirming the confiscation, which led the petitioner to file the present writ petition.

The court was primarily called upon to determine whether the writ petition was maintainable despite the existence of a statutory appellate remedy under Section 107 of the CGST Act. Additionally, the court examined whether the alleged non-supply of relied-upon documents (RUDs) and the purported violation of Rule 138B of the CGST Rules constituted sufficient grounds to bypass the appellate mechanism and invoke the writ jurisdiction of the High Court.

Scope of Article 226 vs Statutory Remedy

The court reiterated that the existence of an alternative remedy is not an absolute bar to maintainability, yet the court must be cautious in exercising its jurisdiction. Referencing the Supreme Court's decision in Assistant Commissioner of State Tax vs. M/s. Commercial Steel Ltd., the bench noted that a petitioner must establish exceptional circumstances, such as a breach of fundamental rights or a violation of the principles of natural justice, to warrant judicial interference in tax adjudication matters.

No Absolute Right to Bypass Appeal

The court emphasized that grievances concerning the adjudicatory process, such as the alleged non-supply of documents or dissatisfaction with the reasoning of an order, are matters strictly within the purview of the appellate authority. The court noted that these issues arise from the adjudicatory record itself and require a factual examination that is best suited for the appellate framework under Section 107 of the CGST Act.

"If, according to the petitioner, such consideration is erroneous or legally unsustainable the statute provides a specific and efficacious remedy by way of an appeal before the competent appellate authority."

Compliance with Principles of Natural Justice

Regarding the petitioner's claim that documents were not supplied, the court scrutinized the record and found that the requisite notices, verification reports, and documents regarding the cancellation of the supplier’s registration had been duly provided. The bench observed that since the petitioner was given an opportunity for a personal hearing and had filed a reply which was considered by the adjudicating authority, there was no merit in the contention that the principles of natural justice were violated.

Adherence to CGST Rules

The court also addressed the petitioner's argument regarding Rule 138B of the CGST Rules, which governs the verification of documents and conveyances. Finding no violation, the bench noted that the physical verification of the conveyance was conducted by a proper officer duly authorized by the Commissioner. The court concluded that the authorities had acted within the scope of their statutory powers under Section 130 of the CGST Act, and any dispute regarding the factual conclusions reached by the authority must be adjudicated by the appellate forum.

Concluding that none of the established exceptions for entertaining a writ petition were met, the High Court dismissed the petition. The court directed the petitioner to exhaust the statutory remedy of filing an appeal before the competent appellate authority, affirming that judicial restraint is essential when a robust administrative remedy is provided by the statute.

Date of Decision: 01 October 2026