The Gujarat High Court held that a writ petition is not maintainable against a Section 74 GST order when a statutory appeal exists, refusing to quash penalty over alleged fake firms. Justices A.S. Supehia and Pranav Trivedi allowed withdrawal with liberty to file afresh.
GUJARAT: The Gujarat High Court has ruled that a writ petition cannot be entertained against an order passed under Section 74 of the GST Act when a statutory appellate remedy is available. Dismissing the transporter’s challenge, the Court declined to interfere with the GST penalty imposed over allegations involving fake firms, emphasizing that the proper course is to pursue the prescribed appeal mechanism under the law.
The matter was heard by Justice A.S. Supehia and Justice Pranav Trivedi, who disposed of the writ petition by permitting the petitioner to withdraw it with liberty to institute a fresh petition assailing the Order-in-Original.
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Factual Backgrounds:
The petitioner, Niraj Ram Kumar Tiwari, who owns M/s. Maa Logistics Transport Company, contested a show-cause notice issued on January 28, 2025, as well as a subsequent Order-in-Original.
Following an inquiry, tax authorities claimed that the petitioner was the true owner of another firm, M/s. Mahalaxmi Transport, and had facilitated the establishment of eight fictitious firms through an associate, Shri Dilshad Alam.
These firms were reportedly utilized for the unauthorized removal of goods and the illegal claiming of Input Tax Credit (ITC) with the intention of tax evasion. The petitioner argued that he had no ties to the purported fake firms and described the investigation as flawed, specifically pointing out that certain Relied Upon Documents (RUDs) were not made available during the proceedings.
Main Issue:
Whether the High Court should exercise its writ jurisdiction to annul the GST demand and penalty when the petitioner has an alternative effective remedy (an appeal) but seeks to evade the obligatory pre-deposit requirement?
HC’s Ruling:
The High Court dismissed the writ petition, opting not to interfere with the Order-in-Original. The Court observed that even though the petitioner was given the opportunity to utilize the statutory appellate remedy under Section 107 of the CGST Act, the petitioner’s counsel insisted on a judgment based on merits to avoid the financial burden associated with the mandatory pre-deposit.
The Court affirmed that the adjudicating authority had issued a comprehensive order after examining evidence related to clandestine transportation and the suppression of facts.
Consequently, the Court ruled that the petitioner should approach the appellate authority to challenge these factual determinations, emphasizing that a writ petition could not be employed to circumvent the statutory process.
Case Title: NIRAJ RAM KUMAR TIWARI (PROP.) M/S MAA LOGISTICS TRANSPORT COMPANY Vs UOI, R/SCA/119/2026
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