Case Law Details
Upakar Infra Projects Private Limited Vs Commissioner of Customs & Central Tax (Telangana High Court)
Telangana High Court Directs Taxpayer to Avail GSTAT Remedy Against Penalty Orders; Declines Writ Jurisdiction
The Telangana High Court declined to entertain a writ petition challenging GST penalty orders where an effective statutory remedy before the Goods and Services Tax Appellate Tribunal (GSTAT) was available. The Court held that since GSTAT had been constituted and was functioning, the petitioner should pursue the appellate remedy provided under Section 112 of the CGST Act.
Introduction
In M/s. Upakar Infra Projects Private Limited v. Commissioner of Customs & Central Tax (Appeals-I) & Others, the Telangana High Court examined whether a taxpayer could directly invoke writ jurisdiction to challenge penalty orders under the GST law when the statutory appellate forum, namely GSTAT, had become operational.
The Court reiterated the settled principle that writ jurisdiction should ordinarily not be exercised when an efficacious alternative statutory remedy is available.
Facts of the Case
The petitioner challenged:
- Order-in-Original dated 25.10.2024, and
- Order-in-Appeal dated 31.10.2025
relating to the tax periods 2018-19 to 2021-22.
The impugned orders imposed:
- Penalty of ₹2,30,68,242 under Section 122(1)(vii) of the CGST Act, 2017;
- Penalty of ₹3,10,63,378 under Section 122(1)(ii) of the CGST Act, 2017; and
- Penalty of ₹50,000 under Section 122(3)(a) of the CGST Act, 2017.
The petitioner approached the High Court contending that:
- The appellate authority failed to properly consider the grounds raised in appeal;
- The appellate order was cryptic and suffered from non-application of mind;
- Parallel proceedings had also been initiated by State Tax authorities under Section 73 of the TGST Act; and
- The writ petition was filed because GSTAT had not been constituted at the relevant time.
Petitioner’s Contentions
The petitioner argued that:
- The appellate authority mechanically rejected the appeal without adequately addressing the issues raised;
- The impugned appellate order was arbitrary and non-speaking;
- Multiple legal and factual grounds warranted judicial interference; and
- The High Court should exercise its writ jurisdiction to set aside the penalty orders.
Revenue’s Position
The Revenue submitted that:
- The petitioner itself acknowledged in the writ petition that the matter was brought before the High Court due to the earlier non-availability of GSTAT;
- GSTAT had since been constituted and was actively entertaining appeals;
- An effective statutory appellate remedy under Section 112 of the CGST Act was now available; and
- The petitioner should be directed to pursue the alternative remedy before the Tribunal.
Court’s Observations
The High Court observed that:
- GSTAT had already been constituted and was functioning;
- The petitioner had an effective alternative statutory remedy of appeal before the Tribunal;
- All questions of fact and law raised by the petitioner could appropriately be examined by GSTAT; and
- Interference under Article 226 was not warranted when the statutory appellate mechanism was available.
The Court emphasized that the existence of a specialized appellate forum weighs against entertaining writ petitions challenging GST adjudication and appellate orders.
Final Decision
The Telangana High Court:
- Declined to entertain the writ petition;
- Granted liberty to the petitioner to file an appeal before GSTAT;
- Directed that the appeal be filed with the requisite statutory pre-deposit within the window period prescribed under GSTAT’s order dated 24.09.2025;
- Left all issues on merits open for consideration by the Tribunal; and
- Disposed of the writ petition without costs.
Key Takeaways
1. GSTAT Remedy Must Be Exhausted
Where GSTAT is operational, taxpayers challenging GST adjudication or appellate orders should ordinarily pursue the statutory remedy before the Tribunal.
2. High Courts May Decline Writ Jurisdiction
The existence of an efficacious alternative remedy remains a strong ground for High Courts to refuse interference under Article 226.
3. Tribunal Can Examine All Legal and Factual Issues
Questions relating to penalty, jurisdiction, procedural irregularities, and merits of assessment can be adjudicated by GSTAT.
4. Constitution of GSTAT Changes Litigation Strategy
Cases earlier brought before High Courts due to non-availability of GSTAT may now be redirected to the Tribunal as the primary appellate forum.
Conclusion
In M/s. Upakar Infra Projects Private Limited v. Commissioner of Customs & Central Tax (Appeals-I), the Telangana High Court reaffirmed the principle that writ jurisdiction should not be invoked where an effective statutory appellate remedy exists. Since GSTAT had become operational, the Court directed the taxpayer to pursue the Tribunal remedy against substantial GST penalty orders exceeding ₹5.41 crore, leaving all issues open for adjudication before the appellate forum.
FULL TEXT OF THE JUDGMENT/ORDER OF TELANGANA HIGH COURT
Heard Mr. Shaik Jeelani Basha, learned counsel for the petitioner; Mr. D.Raghavendar Rao, learned Senior Standing Counsel for Central Board of Indirect Taxes and Customs (CBIC) appearing for respondents No.1 to 3 and Mr. B.Mukherjee, learned counsel representing Mr. N.Bhujanga Rao, learned Deputy Solicitor General of India for respondent No.6.
2. Petitioner has preferred this Writ Petition against the Order-inOriginal dated 25.10.2024, upheld by the Order-in-Appeal dated 31.10.2025 also impugned herein for the tax period 2018-19 to 2021-22, whereby penalty of Rs.2,30,68,242/- under Section 122(1)(vii) of the Central Goods and Services Tax Act, 2017 (for short ‘the Act’), and further penalty of Rs.3,10,63,378/- under Section 122(1)(ii) of the Act had been imposed apart from penalty of Rs.50,000/- under Section 122(3)(a) of the Act.
3. Petitioner, in his statement in Para 15 of the Writ Petition, has also stated that since the Appellate Tribunal under Section 112 of the Act was yet to be constituted, the petitioner has filed the present Writ Petition.
4. Petitioner inter alia has taken a number of grounds including initiation of proceedings leading to imposition of tax by Order-in Original dated 04.05.2024 under Section 73 of the TGST Act by the State Tax authorities. It is also contended that the appellate authority has not dealt with the grounds urged by him and rejected the appeal with a cryptic order, which shows non-application of mind. Therefore, this Court may entertain this Writ Petition and interfere in the impugned orders.
5. On the other hand, learned Senior Standing Counsel for CBIC has also referred to the statement made at Para 15 of the writ petition and submitted that since the Goods and Services Tax Appellate Tribunal(GSTAT) is constituted and is entertaining appeals, this Court may decline to entertain the Writ Petition in view of alternative statutory remedy of appeal where the petitioner may raise all such grounds on facts and in law.
6. In view of the aforesaid facts and circumstances and the availability of an alternative remedy of appeal before the learned GSTAT, we are not inclined to entertain the Writ Petition.
7. Petitioner is at liberty to prefer an appeal with statutory deposit within the window period prescribed under Order dated 24.09.2025, issued by the learned GSTAT.
8. The instant Writ Petition is, accordingly, disposed of. No costs.
As a sequel, miscellaneous petitions, pending if any, stand closed.
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