Jharkhand High Court Refuses Tata Steel's Writ Against GST Demand, Says Appeal Is Proper Remedy

The Jharkhand High Court has recently refused to entertain a writ petition filed by Tata Steel Limited challenging a GST adjudication order involving alleged wrongful availment of input tax credit, holding that the company had not made out a case to bypass the statutory appellate remedy.

“We are satisfied that the petitioner has not made out any case for bypassing the alternate statutory remedy of appeal.”, the court held.

A Bench of Chief Justice M. S. Sonak and Justice Rajesh Shankar underscored that the High Court cannot be converted into an appellate forum in tax matters.

“This Court, in such matters, does not exercise any appellate jurisdiction but only exercises its powers of judicial review.”

The Court emphasised that examining the correctness of findings in the adjudication order would necessarily involve re-evaluation of evidence and disputed facts, which falls outside the scope of writ jurisdiction.

“Any consideration of such a factor would involve adjudication of the disputed issues and evaluation of the material on record.”

The case arose from a challenge to an Order-in-Original dated December 26, 2025, passed under Section 74 of the CGST Act, which applies to cases involving allegations such as fraud, wilful misstatement, or suppression of facts to evade tax. Tata Steel argued that these essential ingredients were absent and that the proceedings were therefore without jurisdiction.

The company also contended that the show cause notice was based on an audit report, that the matter had earlier been placed in the call book, and that it was later recalled on the ground that proceedings would otherwise become time-barred.

It argued that this process violated principles of natural justice and fair play and that its jurisdictional objections were not properly considered in the adjudication order.

Opposing the petition, the Revenue submitted that no exceptional circumstances existed to justify bypassing the appellate remedy. It argued that Tata Steel had been given a full opportunity to respond to the show cause notice, that its submissions were duly considered, and that any grievance on merits could be addressed before the appellate authority.

Agreeing with the Revenue, the High Court held that the dispute involved examination of factual issues, including whether there was wrongful availment of input tax credit and whether fraud or suppression existed. Such issues, the Court noted, could not be adjudicated in writ proceedings and were best left to the appellate forum, which has wider powers to examine both facts and law.

The court rejected the argument that the proceedings were wholly without jurisdiction, observing that the show cause notice could not be said to have been issued without satisfaction of the necessary conditions at the threshold. It held that whether those conditions were ultimately met is a matter for adjudication on merits, which must be tested in appeal.

On the plea of violation of natural justice, the court found no substance, noting that a show cause notice had been issued and an opportunity to reply had been granted.

“Again, whether such answers are correct or not is something that cannot be easily tested by the petitioner by availing of the alternate statutory remedy. However, this is not a case of a patent failure of natural justice as was sought to be projected.”

The court further observed that even the jurisdictional objections raised by Tata Steel were intertwined with disputed factual issues and could not be treated as cases of absolute lack of jurisdiction warranting interference at the writ stage.

Holding that neither of the recognised exceptions for bypassing alternate remedies was attracted, the Court declined to entertain the writ petition and dismissed it.

However, it granted liberty to Tata Steel to file a statutory appeal within four weeks, directing that if such an appeal is filed within that period, the appellate authority shall consider it on its merits without rejecting it on the ground of limitation.

The court also clarified that all contentions of the parties are left open to be decided by the appellate authority and that its observations were confined to the issue of maintainability of the writ petition.

For Petitioner: Senior Advocate Kavin Gulati (through VC), Advocate Salona Mittal

For Respondents: Senior Standing Counsel (CGST) Amit Kumar, Junior Standing Counsel (CGST) Anurag Vijay