Court dismisses petition challenging CGST order, emphasizing adherence to statutory appeal process under Section 107 of CGST Act.
In a significant ruling, the Delhi High Court has dismissed a writ petition filed by Sunil Chauhan, proprietor of Shree Chem India, challenging an adjudication order under the Central Goods and Services Tax (CGST) Act, 2017. The court emphasized the importance of utilizing the statutory appeal process provided under Section 107 of the CGST Act, asserting that extraordinary jurisdiction under Article 226 of the Constitution should only be exercised in exceptional circumstances.
The writ petition, filed under Article 226, sought to quash the Order-in-Original dated December 16, 2025, which confirmed a tax demand of Rs.5,51,34,232/- along with applicable interest and penalties. The petitioner contended that the adjudication proceedings were vitiated due to non-compliance with principles of natural justice, coercion in obtaining statements under Section 70, and excess of jurisdiction by the Adjudicating Authority.
Despite these arguments, the court reiterated that the existence of an alternative statutory remedy, such as an appeal under Section 107, generally precludes intervention through Article 226, except in cases of breach of fundamental rights, violation of natural justice, or jurisdictional errors. The court found none of these exceptions applicable in the current case.
The judgment, delivered by Justices Anil Kshetarpal and Shail Jain, underscored that disputed questions of fact, such as the alleged non-service of personal hearing notices and the voluntariness of statements, are best resolved by the appellate authority. The court also dismissed claims of jurisdictional overreach concerning penalty imposition, citing established precedents affirming the Adjudicating Authority's competence under Sections 73, 74, and 122 of the CGST Act.
In conclusion, the court advised the petitioner to pursue the statutory remedy of appeal, clarifying that the period during which the writ petition was pending would not count towards the limitation period for filing an appeal. This judgment reinforces the judiciary's stance on respecting legislative frameworks for dispute resolution within the GST regime.
Bottom line:-
GST - Principles of natural justice and jurisdiction under Article 226 - High Court refrains from exercising extraordinary jurisdiction under Article 226 where alternative statutory remedy exists unless exceptional circumstances like breach of fundamental rights, violation of principles of natural justice, excess of jurisdiction, or challenge to vires are established.
Statutory provision(s): Article 226 of the Constitution of India, Sections 74, 75, 107, 122 of the Central Goods and Services Tax Act, 2017
