Shree Devidayal Metals Vs State of Gujarat & Ors. (Gujarat High Court)
The Gujarat High Court, in M/s Shree Devidayal Metals v. State of Gujarat & Ors., has ruled that a writ petition is not maintainable in cases involving factual disputes related to fake invoicing and circular trading under the Goods and Services Tax (GST) regime. The Petitioner, a scrap trader, challenged the confiscation of goods and conveyance, alleging that the respondents acted without providing a hearing and without due consideration of their reply. The respondents had detained the goods based on findings that the petitioner’s supplier and its upstream supplier were non-existent or operating from unverifiable premises, with suspicious e-way bills generated after interception, suggesting tax evasion through circular trading.
The High Court observed that the case presented questions of fact, specifically concerning the relationship between the supplier entities and the validity of e-way bills. Such factual disputes, the court stated, are not suitable for adjudication under Article 227 of the Constitution, which governs writ jurisdiction. Relying on the Supreme Court’s decision in Assistant Commissioner v. Commercial Steel Limited, the High Court reiterated that writ petitions should generally not be entertained when effective statutory remedies, such as an appeal under Section 107 of the CGST Act, are available. Exceptions to this rule include breaches of fundamental rights, violations of natural justice, excess of jurisdiction, or challenges to the constitutional validity of a statute. The court found that no such exceptions were present in this case, particularly as a notice had been served on the person in charge of the conveyance, implying no breach of natural justice. Consequently, the petition was dismissed, with the petitioner granted the liberty to pursue the appellate remedy under Section 107 of the CGST Act. This judgment reinforces the importance of utilizing the established hierarchical dispute resolution mechanisms within the GST framework for factual and legal scrutiny of assessment and confiscation orders.
