Rajasthan HC Declines Oil Trader’s Confiscation Challenge, Says Disputed Mustard-vs-Soyabean Facts Belong in GST Appeal

In brief

The question

Whether the writ petition challenging the confiscation order was maintainable despite the statutory appeal available under Section 107 of the CGST/RGST Act

The court held

The Court held that the writ petition was not maintainable because an effective statutory appeal under Section 107 was available and no applicable exception to the alternative-remedy rule had been established.

It also directed

It disposed of the petition, leaving the petitioner at liberty to appeal and directing that any appeal be decided on its merits; it also stated that its observations would prejudice neither party.

01Facts

The petitioner challenged a confiscation order dated 1 October 2026 in FORM GST MOV-11, along with a demand for a bank guarantee of ₹42,05,898.

pp. 2–5, paras 2–5

The goods had been intercepted while being transported under documents declaring them to be soyabean refined oil; physical verification recorded them as mustard oil.

pp. 2–5, paras 2–5

In an earlier writ petition, the High Court had directed release of the goods and vehicle against a bank guarantee, without prejudice to the pending proceedings.

pp. 2–5, paras 2–5

After the petitioner did not furnish the guarantee, the authority completed the proceedings and ordered confiscation.

pp. 2–5, paras 2–5

The petitioner challenged that order, alleging, among other things, jurisdictional error, breach of natural justice, and unlawful quantification; the respondents objected that an appeal under Section 107 of the CGST/RGST Act was available.

pp. 2–5, paras 2–5

02Issues

i.Whether the writ petition challenging the confiscation order was maintainable despite the statutory appeal available under Section 107 of the CGST/RGST Act

pp. 5–7, paras 6–13

ii.Whether the petitioner established an exception to the rule requiring exhaustion of the alternative remedy, including lack of jurisdiction or a gross breach of natural justice

pp. 5–7, paras 8–10

03Law Applied

Section 107 of the CGST/RGST Act provides an appeal against an adjudicating authority’s order, including a confiscation order in FORM GST MOV-11.

p. 5, para 7

The rule requiring exhaustion of an alternative remedy is discretionary, not absolute; however, writ intervention may be warranted in recognised exceptional cases, including where the authority lacks jurisdiction or there is a gross violation of natural justice [p. 6, para 8, citing Whirlpool Corporation v. Registrar of Trade Marks, (1998) 8 SCC 1].

p. 6, para 8

Article 226 is not ordinarily a substitute for the statutory appellate process, particularly where resolution requires appraisal of disputed evidence.

pp. 6–7, paras 8, 10

Provisions in the judgment · 2 · Linked ones open on LawLens

Rajasthan Goods and Services Tax, 2017 Section 130 Section 107

04Reasoning

The Court found that the petitioner had received a show-cause notice, submitted a reply, and been given a personal hearing; the authority then issued a reasoned, 23-page order. It therefore rejected the claim of a natural-justice violation as a basis for bypassing the appeal.

p. 6, para 9

The disputed identity of the oil, the driver’s conduct, the journey time, and the toll/RFID evidence were factual matters suited to the appellate authority’s assessment, not a roving inquiry under Article 226.

pp. 6–7, para 10

The earlier release order had expressly left the proceedings unaffected, and challenges to the bank-guarantee demand or the quantification of fine and penalty could be pursued in the statutory appeal.

p. 7, para 11

05Holding

p. 7, para 13

It disposed of the petition, leaving the petitioner at liberty to appeal and directing that any appeal be decided on its merits; it also stated that its observations would prejudice neither party.

pp. 8, paras 14–16

LawLens.Rajasthan High Court

Original Court PDF