Calcutta High Court Denies Summary Judgment In GST Compliance Dispute, Says Trial Mandatory

The Calcutta High Court on 1 April held that objections relating to GST compliance and supply of goods raise triable issues that require a full trial and refused to grant summary judgment in a commercial dispute.

Justice Aniruddha Roy was hearing an application under Order XIII-A of the Code of Civil Procedure seeking dismissal of the suit on the ground that the plaintiff had no real prospect of success. He observed:

“Once factual enquiry is required to be made on the basis of the case and counter-case made by the parties to a suit, it inevitably gives rise to triable issues for which a properly constituted trial is required.”

S.G. Karel and Sons Jewellers Pvt Ltd (plaintiff) had filed the suit for recovery of dues arising from alleged supply of goods to Madan Lal Agarwalla Jewellers and others (defendant) during February–March 2021. It claimed that the goods were supplied under various invoices and delivery challans, which the defendants accepted, but payments remained outstanding.

Madan Lal Agarwalla argued that the plaintiff failed to comply with statutory requirements under the Central Goods and Services Tax Act and related rules, including time-bound procedural obligations, and therefore the alleged transactions could not be treated as valid supplies.

Rejecting these submissions, the Court held that such issues must be examined in light of pleadings and evidence from both sides. It noted that when factual enquiry is necessary to assess the case and counter-case, triable issues inevitably arise, requiring adjudication through a trial.

Emphasising the plaintiff's vested right to a trial, the Court stated:

“When a plaint is instituted, the plaintiff has a vested right to have his claim adjudicated in the established procedure of law by granting the plaintiff the fullest opportunity, in accordance with law.…Therefore, the right to go for trial in an appropriate case is a vested right of the plaintiff which cannot be taken away under the procedure of summary judgment without holding the trial of the suit.”

Accordingly, the High Court dismissed the defendants' application for summary judgment.

For Plaintiffs: Advocates Indranil Nandi, Gunjan Shah, Sayak Konar, Shreya Agarwal

For Defendants: Advocates Chayan Gupta, Pranay Mukherjee, Pourush Bandopahyay