Ghanshyambhai Kalubhai Malani Vs Union of India (Gujarat High Court)
The Gujarat High Court has declined to entertain a petition filed by Ghanshyambhai Kalubhai Malani, who challenged an order issued under Section 74 of the CGST/SGST Act, 2017. The court, led by learned advocates Mr. Vikramjeet Singh for the petitioner, Ms. Shrunjal Shah for the state respondents, and Ms. Prutha Bhavsar for the Union respondents, directed the petitioner to instead avail the statutory alternative remedy of appeal.
The petitioner had sought a writ of mandamus, asking the High Court to declare that payments made towards mineral royalties were in accordance with State Government instructions. He also sought to strike down the definitions and explanations of “Royalty” provided by the Indian Bureau of Mines and quash the order dated January 17, 2025, issued by the Sales Tax Officer. A key contention raised by the petitioner’s advocate was that the authorities improperly invoked Section 74 of the GST Act, arguing that there was no fraudulent intent in the petitioner’s failure to deposit tax on royalty payments, which he considered a service.
The High Court, however, focused on the principle of exhausting alternative remedies. It cited the Supreme Court’s judgment in The Assistant Commissioner of State Tax & others Vs. M/s. Commercial Steel Ltd. (2021 (9) TMI 480 SC). In that case, the Supreme Court had clarified the exceptional circumstances under which a writ petition under Articles 226/227 of the Constitution of India could be entertained despite the existence of an alternative statutory remedy. These exceptions include:
- A breach of fundamental rights.
- A violation of the principles of natural justice.
- An excess of jurisdiction.
- A challenge to the vires(legal validity) of a statute or delegated legislation.
The Supreme Court in Commercial Steel Ltd. had emphasized that unless one of these exceptional circumstances is established, it is not appropriate for a High Court to entertain a writ petition when an adequate statutory appellate mechanism is available.
