JUDGMENT :

Dhananjaya Y Chandrachud, J.

1. Leave granted.

2. This appeal arises from a judgment of a Division Bench of the High Court of Telangana dated 4 March 2020.

3. The High Court in the exercise of its writ jurisdiction under Article 226 of the Constitution set aside the action of the appellants in collecting an amount of Rs 4,16,447 from the respondent towards tax and penalty under the Central Goods and Services Tax Act 2017 (CGST) and State Goods and Services Tax Act (SGST) and directed a refund together with interest at the rate of 6% per annum from 13 December 2019. A further direction has been issued to the State of Telangana to consider initiating disciplinary proceedings against the Assistant Commissioner. Costs of Rs 25,000 have been imposed on the first appellant, who was the first respondent before the High Court.

4. The respondent is a proprietary concern engaged in the business of iron and steel and is registered under the Central Goods and Services Tax Act 2017 and has been allotted a GST code. The respondent purchased certain goods from a dealer, JSW Steel Limited, Vidyanagar, Karnataka, under a tax invoice dated 11 December 2019. The consignment of goods was being carried in a truck bearing registration No KA 35 C 0141. While it was proceeding from the State of Karnataka, it was intercepted on 12 December 2019 at 5.30 pm at Jeedimetala. The tax invoice indicated that the goods were earmarked for delivery at Balanagar, Telangana. The case of the appellants is that Balanagar is situated between the State of Karnataka and Jeedimetala and that no reasonable person would cross Balanagar and then turn around to go back to the place of destination. The purchase value of the goods appeared to be in the amount of Rs 11,14, 579 from the tax invoices.

5. The case of the revenue was that in the guise of an inter-State sale, the respondent was attempting to sell the goods in the local market by evading SGST and CGST. An order of detention was issued in Form GST MOV-06 on 12 December 2019 and a notice was served on the person in charge of the conveyance. The respondent paid the tax and penalty, following which the goods and the conveyance were released on 13 December 2019.

6. The respondent instituted writ proceedings under Article 226 of the Constitution before the High Court in order to challenge the order of detention dated 12 December 2019 and the notice which was issued under Section 20 of the IGST Act 2017. A refund of tax was sought. A counter affidavit was filed on behalf of the appellants before the High Court.

7. The High Court entertained the writ petition and ordered the refund of the amount collected towards tax and penalty together with interest. The High Court has observed that a mere possibility of a local sale would not clothe the officials to take such an action and there was no material to indicate that an attempt was made by the respondent to deliver the goods at a different place and to sell them in the local market evading CGST and SGST. The High Court has also come to the conclusion that since the vehicle was being driven from Karnataka by the local driver from that State, “it is perfectly possible for the driver to lose his way on account of being unfamiliar with the roads” in Hyderabad and bypass Balanagar to proceed to Jeedimetala.

8. Mr Prashant Tyagi, counsel appearing on behalf of the appellant submits that the High Court was in error in entertaining the writ petition under Article 226 of the Constitution, having regard to the statutory alternative remedy which is available under Section 107 of the CGST Act. Counsel urged that while the existence of a