Statutory remedy of appeal should be availed before invoking writ jurisdiction

Sursarita Vanijya Private Limited Vs Principal Commissioner of Central Goods & Services Tax (Jharkhand High Court)

Summary: The Jharkhand High Court, in Sursarita Vanijya (P.) Ltd. v. Principal Commissioner of CGST [W.P. (T) No. 1598 of 2024], ruled that a writ petition challenging a GST demand could not be entertained without first availing the statutory appeal remedy under Section 107 of the CGST Act, 2017. The petitioner contested the GST demand issued in Form GST DRC-07, which directed them to pay Rs. 42,58,557 under Section 73, along with interest and penalties, on the ground that ITC was availed in contravention of Section 16(2)(c) of the CGST Act. The dispute arose because the petitioner’s supplier had undergone liquidation under the Insolvency and Bankruptcy Code, 2016 (IBC), and their liabilities, including GST dues, were considered extinguished. However, the tax authorities proceeded with the demand, prompting the petitioner to seek relief through a writ petition. The Court acknowledged that issues related to merits and procedural fairness were raised but emphasized that the petitioner had an alternative remedy available under Section 107 of the CGST Act. Citing the principle of exhaustion of remedies, the Court directed the petitioner to file an appeal within two weeks and instructed the Appellate Authority to decide the matter within four weeks of receiving the appeal. The ruling aligns with prior cases, such as Vipin Kevalchand Shrishrimal v. State of Gujarat, where the Gujarat High Court similarly held that an appeal should be preferred before invoking writ jurisdiction. This decision reinforces the legal principle that writ petitions should not be used as a substitute for statutory appellate mechanisms unless exceptional circumstances exist.