The appellant, engaged in the manufacture of lead, was registered under the Himachal Pradesh Goods and Services Tax Act, 2017 (HPGST Act). A provisional attachment order was issued against the appellant’s receivables under Section 83 of the HPGST Act, on the allegation of availing fraudulent Input Tax Credit (ITC) based on invoices from its supplier, GM Powertech. The appellant challenged the attachment order before the Himachal Pradesh High Court, contending that it was issued without jurisdiction, in violation of the prescribed procedure, and without any pending proceedings under Section 74 of the HPGST Act at the time of attachment. The High Court dismissed the petition on the ground that the appellant had an alternative remedy under Section 107 of the Act.

The Supreme Court held that the High Court erred in dismissing the writ petition solely on the ground of alternative remedy. It ruled that the “rule of alternate remedy” is a rule of discretion, not compulsion, and exceptions apply where the action challenged is wholly without jurisdiction or in violation of natural justice. On merits, the Court held that the power of provisional attachment under Section 83 is a drastic and extraordinary power and must be exercised only during the pendency of proceedings under Sections 62, 63, 64, 67, 73, or 74 of the Act. Since no proceedings under Section 74 were pending against the appellant at the time of the attachment, the order was held to be without jurisdiction. The Court further held that such attachment requires tangible material and must satisfy the condition of necessity to protect government revenue. The appeals were allowed, and the orders of provisional attachment were set aside.