Writ: A Virtue of Extraordinary Relief

The Article Writ: A Virtue of Extraordinary Relief is written by Rakesh Agarwal, IRS, Joint Commissioner (AR) (Retd), CESTAT, New Delhi.

MADURAI BENCH OF MADRAS HIGH COURT Judgment Re M/s.Omega Traders Vs Assistant Commissioner, Thanjavur in WA (MD) No.746 of 2025 dated 17.04.2026

The Hierarchy of Remedy: The Judicial system operates on a framework of check and balances, committed to delivery of justice through a hierarchy system to resolve a dispute or litigation. This is usually phrased “layering in the judicial system“. One is not allowed to overstep or bypass ladder in the pyramid of Remedy. In a tax-litigation, proceeding conventionally undergo quasi-judicial adjudication process, followed by appeal remedies through appellate jurisdiction, be it may be Commissioner (Appeals) or the Tribunal (CESTAT/GSTAT). These forums are designed as a self-contained, fact-finding mechanisms in the legal perspective. Only after exhausting these ladders, an unresolved matter enters the doors of the Constitutional Courts (High Court & Supreme Court) in the manner prescribed under the Law/Constitution of India.

The Shift Toward Writ Jurisdiction: A nascent trend in indirect tax litigation is the frequent seeking of “instant solutions” through Writ petitions under Articles 32 of the Constitution. While the Writ is an indisputable constitutional right, it is traditionally reserved for testing the “legal invalidity” of an action—specifically issues of jurisdiction, the vires of statutes, manifest errors of law, or violations of the principles of natural justice.

However, a new justification for Writ maintainability has emerged: the inefficiency of the remedy for the reasons of non-performing, non-efficient and non-economical appeal remedy. The non-functionality of the GSTAT (seven years post-GST rollout), persistent vacancies in CESTAT, delayed decisions and the financial burden of “pre-deposits” have made statutory appeals non-economical and ineffective.

While High Courts do not typically sit as fact-finding bodies, they are increasingly entertaining technical issues of valuation and classification under Writ jurisdiction when the statutory machinery is seen to be failing or appearing unjustifiable.

Though the Courts acknowledges “Rule of Exhaustion of Remedies“, but the Government is not able to convince the courts that the issue is purely a disputed question of fact and law has to be applied in the ambit of the facts.

A Case Study: Recently, the Madurai bench of Madras High Court has considered the scope of a writ in the matter of classification of Chewing Tobacco. The issue before the Court was that petitioner was classifying its product, namely unmanufactured tobacco under CETH 2403 99 10, which they voluntary changed to CETH 2403 99 90 after introduction of GST on 01.07.2017, but without any change in the product or its manufacturing process. Revenue considered this is an attempt to pay less compensation cess, which was 160% on products falling under CETH 2403 99 10 against 96% on the goods under CETH 2403 99 90.

The department issued SCN followed by adjudication against the petitioner. On being challenged the OIO through writ in the High Court, Judge dismissed writ petition and relegated to avail appellate remedy under Section 107 of the CGST Act 2017. This order of the Single Judge bench challenged in writ appeal.

The Division Bench of the Madurai bench of Madras High Court held the writ to be maintainable. While adjudging the classification in favor of the petitioner, the Court framed its decision within four critical jurisprudential pillars.

The application of these four jurisprudential pillars:

The Rule of Exhaustion of Remedies-…mere availability of an alternative remedy of appeal or revision, does not automatically oust the jurisdiction of the high court. A Writ is maintainable if the controversy is purely legal (not requiring a fresh investigation into facts) or if the appellate process would be a ‘futile exercise’;
The Doctrine of consistency-…correctness in law overrides historical consistency. Inconsistency cannot be a ground not to judge. One can be consistently wrong too. An assessee’s past conduct does not prevent them from adopting the correct legal classification later;
The Doctrine of estoppel-…no estoppel in law in a taxation matter. Taxation is governed by statute. An admission made by an assessee during an inquiry or in a previous classification does not bind them if the law dictates a different treatment; and
The Burden of Proof-…onus lies only on the department to justify the classification

The Rule of Exhaustion of Remedies

Where controversy is purely legal one and it does not involve disputed questions of fact but only questions of law, then writ petition can be entertained without considering availability of an appellate alternative remedy.

This proposition is well settled by Supreme Court in State of U.P. v. Indian Hume Pipe Co. Ltd. {(1977) 2 SCC 724} as was held that thereis no rule of law that the High Court should not entertain a writ petition where an alternative remedy is available to a party. It is always a matter of discretion with the Court and if the discretion has been exercised by the High Court not unreasonably, or perversely, it is the settled practice of this Court not to interfere with the exercise of discretion by the High Court.

Further, the Supreme Court in Godrej Sara Lee Ltd vs The Excise and Taxation Office {2023 (2) TMI 64} reaffirmed that classification disputes often raise “pure questions of law” and if investigation into facts is unnecessary, the high court could entertain a writ petition in its discretion even though alternative remedy was not availed of.

The Madras High Court (Madurai Bench) in the case has taken a preemptive decision that petitioner may not get justice in appeal.The Madurai Bench further noted that relegating the petitioner back to the Appellate Authority would be a “futile exercise,” as the Single Judge’s initial remarks had already prejudiced the lower authority’s independence. No purpose will be served by filing an appeal.

The Doctrine of Consistency

High Court viewed that what matters more is correctness and we are here to judge which stand is correct. The Court noted—in a lighter but significant vein—that ‘one can be consistently wrong’. In any event, the stand of the assessee is not really relevant. They are bound to take a position that suits them. We cannot therefore blame them for being inconsistent. When the matter comes up before us for consideration, it is our duty to answer the question posed to us to the best of our lights.

The past conduct of the assessee is not the determining factor.

The Doctrine of Estoppel

Well settled proposition is that there is no estoppel against the law in a taxation matter.

Supreme Court in the case of CCE v. Maheshwari Mills Ltd (2002) 10 SCC 733 explained the laid down principles in Elson Machines Pvt Ltd vs Collector of Central Excise 1988 (38) E.L.T. 571 (SC) that there is no estoppel against seeking to take a different view from that taken in an approved classification list.

The Madras High Court (Madurai Bench) viewed that even if the assessee had made a wrong admission, that would not be conclusive of a classification dispute. The department must apply its mind and justify the classification it proposes to adopt.

There can be no estoppel against law is an indubitable proposition. The assessee is not bound by the stand they had originally taken or by the admission made during enquiry.

There is yet another justification on first principles. The principle of estoppel is invoked only when the other party changes their position pursuant to the representation made. Courts then restrain the party that made the representation from resiling from their stand. This is the condition precedent for applying the doctrine of estoppel.

Burden of Proof

The onus of proving a specific classification lies squarely on the Department.

In HPL Chemicals Ltd vs CCE 2006 (197) E.L.T 324, the Supreme Court held that since classification relates to chargeability, the Revenue must adduce proper evidence to displace the assessee’s claim and discharge the burden of proof.

In Union of India and Ors. v. Garware Nylons Limited and Ors {1996 (87) ELT 12}, the Supreme Court held that the burden of proof is on the taxing authorities to show that the particular case or item in question is taxable in the manner claimed by them. Mere assertion in that regard is of no avail. It has been held by this Court that there should be material to enter appropriate finding in that regard and the material may be either oral or documentary.

In Commissioner of Central Excise, Nagpur Vs. Vicco Laboratories (2005) 4 SCC 17, the three Judges Bench of the Supreme Court reiterated that the burden of proof that a product is classifiable under a particular tariff head is on the revenue and the Revenue must prove that a product is understood by consumers or “common parlance” to fall under the specific heading they propose.

Conclusion: Establishment of legal Precedents: This judgment reinforces the principle that while the Executive has the domain to determine the nature of levies, the Judiciary retains the power of scrutiny. The role of the court can always be sought to decide if the controversy is not backed by reasons, germane, and irrelevant to the matter. It confirms that:

Classification must be determined strictly on merits.
Judicial review extends to the legality and bona fides of executive decisions.
The Revenue cannot use “past conduct” as a substitute for substantive evidence.
An “Adjudication Order” is not the end of the road, even if the facts seem settled.
If the Revenue hasn’t discharged its “burden of proof”, the High Court remains a viable venue for relief.