Writ Dismissed Due to Availability of Statutory Appeal Under Section 107

Case Title: M/s Shree Devidayal Metals v. State of Gujarat & Ors.
Court: High Court of Gujarat
Petition Number: R/Special Civil Application No. 6598 of 2025
Category: Confiscation of Goods and Conveyance – Section 130
Date of Judgement: 08/05/2025
Relevant Sections: Sections 129, 130, 107 of CGST Act; Rule 21(b) of CGST Rules

Facts of the Case [Para 3–7]:

• The petitioner, a registered GST dealer, regularly files GST returns and procures scrap from various suppliers.

• On 22.03.2025, goods were intercepted by the State Tax Officer (Amirgadh, Mumbai Squad). MOV-01 and MOV-02 were issued.

• The petitioner argued that there was no discrepancy in the invoices or e-way bills and physical verification was duly conducted (MOV-04).

• However, based on spot verification, it was found that the supplier (M/s Dhatu Metallo Industries Pvt. Ltd.) and its supplier (M/s Mewad Scrap) were non-existent at their registered addresses.

• As a result, goods were detained via MOV-06, and a confiscation notice under Section 130 was issued via MOV-10, followed by a final confiscation order in MOV-11 on 06.04.2025.

Questions in Consideration [Para 2, 9]:

• Whether the High Court should interfere under Article 227 against the confiscation orders without exhausting the alternate remedy under Section 107.

• Whether there was denial of natural justice in passing MOV-11 without considering the petitioner’s reply.

Observations of the Court [Para 9]:

• The Court observed that factual disputes exist regarding the relationship between M/s Dhatu Metallo Industries and M/s Mewad Scrap.

• Following the Supreme Court’s decision in The Assistant Commissioner of State Tax v. M/s Commercial Steel Ltd., 2021 (9) TMI 480 (SC), the Court held:

  • Writ is not maintainable when an alternative statutory remedy under Section 107 exists.

  • There is no breach of natural justice as notice was served.

  • Issues raised are factual and best examined by the appellate authority.

Judgement of the Court [Para 10–11]:

• The Court dismissed the writ without entering into merits.

• Petitioner is permitted to pursue appeal under Section 107 of CGST Act.

Between Fine Lines (Simplified Outcome):

1. High Court refused to intervene since petitioner had a statutory remedy under GST law.

2. Factual disputes about fake billing and related parties need to be examined by the appellate authority.

3. No violation of natural justice was found as the petitioner had an opportunity to respond.

4. The Court cited a binding precedent where writ was held impermissible without exhausting alternate remedies.

5. Petitioner must now file an appeal under Section 107 to contest the confiscation.

Summary of Referred Cases

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