Case Law Details
Kai International Private Ltd Vs Commissioner of CT & GST (Orissa High Court)
Writ Petition Rejected Because Classification of Iron Ore Exports Requires Factual Adjudication; High Court Declines GST Relief Because Alternative Remedy Before Tribunal Was Not Exhausted; GST Classification Dispute on Iron Ore Exports Sent to Statutory Forum Because Facts Were Involved; Orissa High Court Refuses to Examine GST Classification Because Tribunal Remedy Exists.
In this case, the petitioner, a supplier of goods and services, was subjected to audit proceedings under Section 65 of the GST Act. Following submission of the audit report, proceedings under Section 73 were initiated, resulting in an order dated 27.08.2024 raising demand of tax, interest, and penalty after the adjudicating authority found the petitioner’s reply unsatisfactory.
The petitioner challenged the adjudication order before the appellate authority under Section 107 of the GST Act. By order dated 10.04.2025, the Additional Commissioner of State Tax (Appeal), Rourkela modified the adjudication order and reduced the demand to Rs.55,62,048/-.
Still aggrieved, the petitioner filed a writ petition before the Orissa High Court contending that the appellate authority failed to correctly appreciate the classification of the transaction. The petitioner argued that export of iron ore fines having Fe content above 57% constituted purely “supply of goods” and could not be treated as “composite supply of goods and services”.
The State opposed the writ petition on the ground that the petitioner had an effective alternative statutory remedy under Section 112 of the GST Act before the Goods and Services Tax Appellate Tribunal.
The High Court held that the petitioner had approached the Court without exhausting the statutory appellate remedy. The Court observed that determination of whether export of iron ore fines amounted to “supply of goods” or “composite supply of goods and services” involved factual adjudication, which falls within the jurisdiction of fact-finding authorities under the GST framework.
Relying on the Supreme Court decision in Radha Krishan Industries v. State of Himachal Pradesh, the Court reiterated that where an effective alternative remedy exists, the High Court should ordinarily refrain from exercising jurisdiction under Article 226. Accordingly, the writ petition was dismissed, with liberty granted to the petitioner to approach the appropriate forum under the GST Act.
FULL TEXT OF THE JUDGMENT/ORDER OF ORISSA HIGH COURT
1. The Petitioner, Supplier of Goods and Services, consequent upon notice for audit under Section 65 of the GST Act read with Section 101 of the Central Goods and Services Tax Act, 2017/the Odisha Goods and Services Tax Act, 2017 (Collectively, “GST Act”), participated in the proceeding. As a consequence of submission of audit report, proceeding under Section 73 of the GST Act was initiated and upon being noticed, the petitioner filed its reply which in the opinion of the adjudicating authority found to be unsatisfactory. A demand of tax, interest and penalty was raised under Section 73 of the GST Act vide order dated 27.08.2024.
1.1 The said adjudication order was carried in appeal on 12.11.2024 under Section 107 of the GST Act, which came to be disposed of vide order dated 10.04.2025 by the Additional Commissioner of State Tax (Appeal), Rourkela whereby the adjudicating order was modified and demand came to be reduced to Rs.55,62,048/-.
1.2 Still aggrieved thereby, said order is assailed in this writ petition on the ground, inter alia, that the Appellate Authority failed to appreciate in proper perspective the classification of nature of supply.
2. Advancing his argument Sri Chitta Ranjan Das, learned Advocate strenuously urged that the activity of export of iron ore fines having Fe contents of more than 57% is purely “supply of goods”, which can at no stretch of imagination be comprehended to mean “composite supply of goods and services”.
3. Such plea has strongly been opposed by the learned Standing Counsel, as the petitioner is not to be allowed to circumvent the alternative remedy available under the GST Act and rules framed thereunder.
4. Since the petitioner has approached this Court by way of filing this writ petition without exhausting effective and efficacious remedy provided under the statute to approach the Goods and Services on Appellate Tribunal under Section 112 of the GST Act to assail order in appeal, this Court is not inclined to entertain this writ petition.
5. On the considered view of this Court, the nature of relief claimed so as to determine whether the transaction of export of iron ore fines is “supply of goods” simpliciter or a composite of supply of goods and services would fall within the domain of fact finding authorities, who are vested with powers to adjudicate both on question of facts as well as question of law.
6. The Hon’ble Supreme Court in Radha Krishan Industries Vrs. State of Himachal Pradesh, (2021) 3 SCR 406, held, inter alia, that where an effective alternative remedy is available to the aggrieved person, the High Court ought to restrain itself from exercising power under Article 226 of the Constitution of India and when a right is created by statute, which itself prescribes the remedy or procedure for enforcing the right for liability, resort must be had to that particular statutory remedy before invoking the discretionary remedy under Article 226 of the Constitution of India. It is made clear that this rule of exhaustion of statutory remedies is a rule of policy, convenience and discretion.
7. In view of such enunciation of principles by the Hon’ble Supreme Court of India, this Court desists to entertain this writ petition questioning the legality of the appellate order in order to adjudicate whether the export of iron of fines would be comprehended within the meaning of “supply of goods” or “composite supply of goods and services”. However, liberty is granted to the petitioner, if so advised, to approach appropriate forum as available under the GST Act and Rules framed thereunder.
8. With the aforesaid observation, the writ petition along with the pending Interlocutory Application (s), if any, shall stand dismissed.
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