Writ petition is not maintainable unless the statutory remedy to appeal has been exhausted

The Hon'ble Chhattisgarh High Court in Mayasheel Retail India Ltd. v. State of Chhattisgarh [Writ Petition No. 84 of 2024 dated April 04, 2025]  dismissed the writ petition where the Assessee had challenged demand order on ground that it came to Assessee's knowledge pursuant to issuance of recovery notice. It was issued without issuing a Show Cause Notice ("SCN") under Section 73 of the Central Goods and Services Tax Act, 2017 ("the CGST Act") and without scheduling a personal hearing. The Order was appealable. Assessee had not been able to make out any exceptional case to interfere with order in extraordinary and discretionary jurisdiction under Article 226 of the Constitution of India ("the Constitution").

Facts:

Mayasheel Retail India Ltd.("the Petitioner") challenged a Demand Order passed under Form GST DRC-07 dated January 11, 2021 ("the Impugned Order") which came to the knowledge of the Petitioner pursuant to the issuance of recovery notice dated February 27, 2024 ("the Impugned Notice"). The Impugned Order was passed without issuance of a Show Cause Notice ("SCN") under Section 73 of the CGST Act and without scheduling a personal hearing in the matter.

Even the summary of SCN was issued in Form GST DRC-01 through e-mail, which is not a prescribed mode of service. The Petitioner gained knowledge about the issuance of the Impugned Order pursuant to the issuance of the Impugned Notice for recovery, on February 29, 2024. Further, even otherwise, the assessment qua issue adjudicated in the Impugned Order had been reopened by way of issuing scrutiny notice in Form GST ASMT-10 dated January 05, 2024 and notice in Form GST DRC-01 dated January 30, 2024. The Petitioner duly participated in said reopened proceedings by way of submitting his representation(s) and the demands were dropped qua said issue in entirety, after considering the representations made by the Petitioner.

Therefore, the Petitioner has filed the present petition since the Impugned Order was not withdrawn as well as the consequential Impugned Notice.

Issue:

Whether a writ petition is maintainable if the statutory remedy to appeal has not been exhausted?

Held:

The Hon'ble Chhattisgarh High Court Writ Petition No. 84 of 2024 held as under:

• Observed that, it is appropriate to deal with the issue about the situations when despite the availability of an alternative and efficacious statutory remedy, a writ petition under Article 226 of the Constitution can be entertained. Chapter XVIII of the CGST Act contains the provisions for appeal and revision. As per Section 107(1) of the CGST Act, any person aggrieved by any decision or order passed under the CGST Act, by an Adjudicating Authority may appeal to such Appellate Authority as may be prescribed within three months from the date on which the said decision or order is communicated to such person. The Impugned Order in the present case was indisputably an appealable order under Section 107(1) of the CGST Act. The Petitioner instead of preferring such an appeal has preferred the instant writ petition.
• Noted that, it is settled that the availability of an alternative remedy does not always operate as a bar to the maintainability of a writ petition under Article 226 of the Constitution. Even if a writ petition is maintainable, the High Court in its extra-ordinary and discretionary jurisdiction may not entertain a writ petition.
• Relied on, the Hon'ble Supreme Court of India in M/s Godrej Sara Lee Ltd. v. The Excise and Taxation Officer-cum-Assessing Authority and others[(2023) 3 SCR 871] wherein distinct concepts of 'maintainability' and 'entertainability' have been succinctly explained. It has been observed that Article 226 of the Constitution does not, in terms, impose any limitation or restraint on the exercise of power to issue writs. Exercise of writ powers despite availability of a remedy under the very statute which has been invoked and has given rise to the action impugned in the writ petition ought not to be made in a routine manner, yet, the mere fact that the Petitioner before the High Court, in a given case, has not pursued the alternative remedy available to him/it cannot be construed as a ground for its dismissal. It has been observed that the High Courts, bearing in mind the facts of each particular case, have a discretion whether to entertain a writ petition or not. One of the self-imposed restrictions on the exercise of power under Article 226 of the Constitution that has evolved through judicial precedents is that the High Courts should normally not entertain a writ petitions, where an effective and efficacious alternative remedy is available. At the same time, it is required to be remembered that mere availability of an alternative remedy of appeal or revision, which the party invoking the jurisdiction of the High Court under Article 226 of the Constitution has not pursued, would not oust the jurisdiction of the High Court and render a writ petition 'not maintainable'. Availability of an alternative remedy does not operate as an absolute bar to the 'maintainability' of a writ petition. It has, thus, been observed that 'entertainability' and 'maintainability' of a writ petition are distinct concepts. While an objection to the 'maintainability' goes to the root of the matter, the question of 'entertainability' is entirely within the realm of discretion of the High Courts. Being otherwise maintainable, it has been enunciated that dismissal of a writ petition by a High Court on the ground that the petitioner has not availed the alternative remedy without examining the aspect of whether an exceptional case has been made out for such entertainment would not be proper.
• Relied on, the Hon'ble Supreme Court of India in Commissioner of Income Tax and others v. Chhabil Dass Agarwal [[2014] 1 SCC 603] where it was observed that it is settled law that non-entertainment of petitions under writ jurisdiction by the High Court when an efficacious alternative remedy is available is a rule of self-imposed limitation. It is essentially a rule of policy, convenience and discretion rather than a rule of law. Undoubtedly, it is within the discretion of the High Court to grant relief under Article 226 of Constitution despite the existence of an alternative remedy. However, the High Court must not interfere if there is an adequate efficacious alternative remedy available to the petitioner and he has approached the High Court without availing the same unless he has made out an exceptional case warranting such interference or there exist sufficient grounds to invoke the extraordinary jurisdiction under Article 226 of the Constitution.
• Relied on, Assistant Commissioner of State Tax & Ors. v. M/s Commercial Steel Limited [2021 7 SCR 660], wherein the Hon'ble Apex Court has observed as quoted below:

"12. In the present case, none of the above exceptions was established. There was, in fact, no violation of the principles of natural justice since a notice was served on the person in charge of the conveyance. In this backdrop, it was not appropriate for the High Court to entertain a writ petition. The assessment of facts would have to be carried out by the appellate authority. As a matter of fact, the High Court has while doing this exercise proceeded on the basis of surmises. However, since we are inclined to relegate the respondent to the pursuit of the alternate statutory remedy under Section 107, this Court makes no observation on the merits of the case of the respondent.

13. For the above reasons, we allow the appeal and set aside the impugned order of the High Court. The writ petition filed by the respondent shall stand dismissed. However, this shall not preclude the respondent from taking recourse to appropriate remedies which are available in terms of Section 107 of the CGST Act to pursue the grievance in regard to the action which has been adopted by the state in the present case."

• Noted that, the Petitioner has not been able to make out any exceptional case to interfere with the Impugned Order in the extra-ordinary and discretionary jurisdiction under Article 226 of the Constitution. Hence, the instant writ petition was not to be entertained. It is accordingly held.
• Held that, the observations made were only for the purpose of examining whether the writ petition on the basis of the grounds urged/pleaded, is to be entertained or not. It was clarified that non-entertainment of the writ petition shall not preclude the writ petitioner from raising all contentions on facts and law before the statutory appellate authority and none of the observations made herein shall be construe observations on merits of the claims of the Petitioner. If the Petitioner prefers a statutory appeal under Section 107 of the CGST Act, the appellate authority shall take into consideration the factum of preferring the instant writ petition and the time period spent, while considering the issue of limitation.

Our Comments:

Section 107 of the CGST Act prescribes 'Appeals to Appellate Authority'. Section 107(1) of the CGST Act prescribes that any person aggrieved by any decision or order passed under the CGST Act or the State Goods and Services Tax Act, 2017 or the Union Territory Goods and Service Tax Act, 2017 by an adjudicating authority may appeal to such Appellate Authority as may be prescribed within three months from the date on which the said decision or order is communicated to such person.

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