Facts of the Case

The appellant, Fasalurahman P.T., aged 39, is the proprietor of National Enterprises, Palakkad, Kerala. He had filed WP(C) No. 38396/2023 before the Kerala High Court seeking to quash Ext.P6, a confiscation order issued by the Senior Enforcement Officer, Enforcement Squad No.1, State Goods and Service Tax Department, Perumanoor, Ernakulam, under Section 130 of the GST Act. The learned Single Judge dismissed the writ petition by judgment dated 17.11.2023, relegating the appellant to the statutory remedy of appeal under Section 107 of the CGST/SGST Act. Aggrieved, the appellant carried the matter in intra-court appeal as WA No. 2075 of 2023 before a Division Bench comprising Dr. Justice A.K. Jayasankaran Nambiar and Dr. Justice Kauser Edappagath, which came up for admission and was decided on the same day, 11.12.2023.

Issues Involved

  1. Whether the writ petition against the Section 130 confiscation order was maintainable under Article 226 without exhausting the statutory appellate remedy, on the ground that the order was without jurisdiction.
  2. Whether the finding that goods were transported without valid documents with intent to evade tax involved disputed questions of fact unsuitable for writ adjudication.
  3. Whether the Supreme Court's ruling in Godrej Sara Lee Ltd. permitting writ jurisdiction for purely legal controversies applied to the facts of this case.

Petitioner's Arguments

  • Ext.P6 was issued by the Senior Enforcement Officer without jurisdiction, so the writ petition was maintainable despite the existence of an alternative statutory remedy.
  • Relied on the Supreme Court's decision in M/s Godrej Sara Lee Ltd. v. The Excise and Taxation Officer-cum-Assessing Authority and Others [2023 LiveLaw (SC) 70] to argue that a purely jurisdictional challenge need not await the statutory appeal.
  • The consignment was admittedly accompanied by a Bill of Supply and an e-way bill, even though the physical copy of the Bill of Supply could not be produced at the moment of interception, so the confiscation was ex facie illegal.
  • The finding in Ext.P6 that goods were transported without valid documents to evade tax was recorded without any reasons, and Section 130 of the GST Act was wrongly invoked.

Respondent's Arguments

  • Whether the appellant transported the goods without valid documents with an intention to evade tax, and whether Section 130 of the GST Act was rightly attracted, are disputed questions of fact.
  • Such factual disputes cannot be adjudicated by the High Court in the exercise of its writ jurisdiction under Article 226 of the Constitution.
  • The Godrej Sara Lee exception is confined to controversies that are purely legal in nature; it does not extend to cases turning on disputed facts, as in the present matter.
  • The appellant has an adequate and efficacious alternative remedy of appeal under Section 107 of the CGST/SGST Act, including the ability to seek interim release of the goods.

Court Order/Findings

  • The Division Bench held that the controversy in the present case was not purely legal, as it involved disputed questions of fact regarding whether the goods were transported without documents to evade tax.
  • Where disputed questions of fact are involved, the writ court will not adjudicate a challenge to a Section 130 confiscation order and will relegate the party to the statutory appeal under Section 107 of the CGST/SGST Act.
  • The Single Judge's decision to relegate the appellant to the alternative statutory remedy was held to be absolutely justified.
  • The appellant was given liberty to raise all contentions before the Appellate Authority and also to move an application for interim release of the goods and conveyance.
  • The writ appeal was accordingly dismissed.

Important Clarification

  • The Godrej Sara Lee exception to the rule of exhaustion of alternative remedies applies only where the controversy is purely a question of law; it does not permit bypassing the statutory appeal where the facts underlying a Section 130 confiscation - such as whether valid documents accompanied the consignment or whether there was intent to evade tax - remain disputed.
  • A party aggrieved by a GST confiscation order retains full liberty to raise jurisdictional and factual contentions before the Appellate Authority under Section 107, and may separately apply for interim release of the confiscated goods and conveyance during the pendency of the appeal.

Sections Involved

  • Section 130, CGST Act, 2017 - empowers confiscation of goods and conveyance, and imposition of penalty, where goods are transported or supplied with intent to evade tax.
  • Section 107, CGST/SGST Act, 2017 - provides the statutory remedy of appeal to the Appellate Authority against orders passed under the Act, including confiscation orders.
  • Article 226, Constitution of India - confers writ jurisdiction on High Courts, generally not exercised where disputed facts require adjudication and an efficacious alternative remedy exists.

Decision - In Favour of

The decision is in favour of the Department. The writ appeal was dismissed and the appellant was relegated to the statutory appellate remedy under Section 107 of the CGST/SGST Act, with liberty to raise all contentions, including on jurisdiction and facts, before the Appellate Authority, and to seek interim release of the goods and conveyance.

Related Case Laws

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Case Details

  • Court: Kerala High Court
  • Case No.: WA No. 2075 of 2023
  • CNR: Not available on record
  • Coram: Dr. Justice A.K. Jayasankaran Nambiar and Dr. Justice Kauser Edappagath
  • Decision Date: 11 December 2023
  • Disposal Nature: Dismissed

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