THE ASSISTANT COMMISSIONER OF STATE TAX AND OTHERS versus M/S. COMMERCIAL STEEL LIMITED

Citation: [2021] 7 S.C.R. 660 · Decided: 03-09-2021 · Supreme Court of India · Bench: D.Y. CHANDRACHUD · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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SUPREME COURT REPORTS
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THE ASSISTANT COMMISSIONER OF STATE TAX AND
OTHERS
v.
M/S. COMMERCIAL STEEL LIMITED
(Civil Appeal No. 5121 of 2021)
SEPTEMBER 03, 2021
[DR DHANANJAYA Y CHANDRACHUD,
VIKRAM NATH AND HIMA KOHLI, JJ.]
Constitution of India – Ar.226 – Central Goods and Services
Tax Act 2017 – s.107 – The case of Revenue that in the guise of an
inter-State sale, the respondent was attempting to sell the goods in
the local market by evading SGST and CGST – An order of detention
was issued and a notice was served on the person in charge of the
conveyance –The respondent paid tax and penalty, following which
the goods and the conveyance were released –Writ petition was
filed by the respondent – The High Court ordered the refund of the
amount collected towards tax and penalty together with interest –
Before the Supreme Court, the appellant contended that the High
Court was in error in entertaining the writ petition u/Art.226 of the
Constitution, having regard to the statutory alternative remedy which
is available u/s.107 of the CGST Act –Held: The respondent had a
statutory remedy u/s.107 – Instead of availing the remedy, the
respondent instituted a petition u/Art.226 – The existence of an
alternate remedy is not an absolute bar to the maintainability of a
writ petition u/Art.226 of the Constitution – But a writ petition can
be entertained in exceptional circumstances where there is: (i) a
breach of fundamental rights; (ii) a violation of the principles of
natural justice; (iii) an excess of jurisdiction; or (iv) a challenge to
the vires of the statute or delegated legislation – In the instant case,
none of the exceptions was established – There was no violation of
the principles of natural justice, as notice was served on the person
in charge of the conveyance – It was not appropriate for the High
Court to entertain a writ petition –Thus, respondent relegated to
pursue the alternate statutory remedy u/s.107 of the CGST Act –
The impugned order of the High Court is set aside.
[2021] 7 S.C.R. 660
660
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CIVIL APPELLATE JURISDICTION: Civil Appeal No.5121 of
2021.
From the Judgment and Order dated 04.03.2020 of the High Court
of Judicature at Hyderabad for the State of Telangana in Writ Petition
No.2161 of 2020.
Prashant Tyagi, P. Venkat Reddy, P. Srinivas Reddy, M/s Venkat
Palwai Law Associates, Advs. for the Appellants.
Shaik Mohamad Hanif, Mrs. Srilakshmi Velicheti, Mrs. Divya
Mishra, Mrs. Suresh Kumar, Irshad Ahmad, Advs. for the Respondent.
The Judgment of the Court was delivered by
DR DHANANJAYA Y CHANDRACHUD, J.
1. Leave granted.
2. This appeal arises from a judgment of a Division Bench of the
High Court of Telangana dated 4 March 2020.
3. The High Court in the exercise of its writ jurisdiction under
Article 226 of the Constitution set aside the action of the appellants in
collecting an amount of Rs 4,16,447 from the respondent towards tax
and penalty under the Central Goods and Services Tax Act 2017 (CGST)
and State Goods and Services Tax Act (SGST) 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, who was the first respondent before the High Court.
4. The respondent  is a proprietary concern engaged in the business
of iron and steel and is registered under the Central Goods and Services
Tax Act 2017 and has been allotted a GST code. The respondent
purchased certain goods from a dealer,  JSW Steel Limited, Vidyanagar,
Karnataka, under a tax invoice dated 11 December 2019. The
consignment of goods was being carried in a truck bearing registration
No KA 35 C 0141. While it was proceeding from the State of Karnataka,
it was intercepted on 12 December 2019 at 5.30 pm at Jeedimetala. The
tax invoice indicated that the goods were earmarked for delivery at
Balanagar, Telangana. The case of the appellants is that Balanagar is
situated between the State of Karnataka and Jeedimetala and that no
THE ASSISTANT COMMISSIONER OF STATE TAX AND OTHERS v. M/S.
COMMERCIAL STEEL LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]
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[2021] 7 S.C.R.
reasonable person would cross Balanagar and then turn around to go
back to the place of destination. The purchase value of the goods
appeared to be in the amount of
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