Unsetting of the settled issues under GST Laws. Part three.

The division bench of Bombay High Court on 20/04/2026 has come across a case where the State Tax officials have violated the provisions of Section 75 (7) and also omitted to consider the exemption as provided under the statutory exemption notification and raised demand much in excess than the amount shown as payable in the Show Cause Notice. The only argument that the respondent had was that there exists an efficacious alternate remedy through appeal and accordingly, the writ may be dismissed. The high court has examined the issues and set aside both SCN as well as OIO and remanded the matter for fresh consideration. 2026 (5) TMI 1724 - BOMBAY HIGH COURT in the matter of  Yash Innovative Solution LLP. Versus Joint Commissioner Goods and Services Tax and State Taxation Aurangabad., State Tax Officer Aurangabad..

The basic issue in this case is the differences between GSTR 7 and GSTR 3B. Revenue took the stand that a sum of Rs. 57,55,627 was payable towards GST and issued the SCN on 18/06/2025. The SCN was duly replied on 17/07/2025 and the taxpayer replied that the exemption available in line with notification number 12/2017 dated 28/06/2017 is applicable in their case and also submitted relevant documents in support of their claim. However, the authorities passed the adjudication order on 26/12/2025 raising a demand of Rs.2,06,46,142 which is much higher than the amount proposed in the show cause notice. The reply to SCN as well as other supporting documents submitted were also ignored and the authorities have passed the OIO in gross violation of the CGST/SGST Act which is impermissible.

Accordingly, the plea of the respondent that alternate remedy may be tried as GSTAT is also operational now was not considered and the division bench took the stand that the availability of alternate remedy is not a total ban on entertaining the writs and ruled in absolute terms that in the following circumstances, writ is still maintainable.

'(i) where the writ petition seeks enforcement of any of the fundamental rights

(ii) where there is violation of principles of natural justice;

(iii) where the order or the proceedings are wholly without jurisdiction; or

(iv) where the vires of an Act is challenged.'

Thus the division bench has concluded that the order passed by the adjudication officer on 16/12/2025 is unsustainable on both the grounds of violation of section 75 (7) as well as violation of the principles of natural justice as well as the reply to SCN and supporting documents furnished were not considered.

The operative portions are very interesting which are as below:

'14. In the result, Writ Petition succeeds. The impugned show cause notice dated 18.06.2025 as well as the impugned order dated 26.12.2025 are hereby quashed and set aside.

15. The matter is remanded back to respondent No. 2 for consideration on merits in accordance with law after giving opportunity of hearing to the petitioner. The said exercise shall be completed within eight (8) weeks from the date of receipt of copy of this order.

16. Respondents are permitted to issue additional demand notice to the petitioner.

17. Rule is made absolute in the above terms'.

It may be noted that prior to September 2025, all jurisdictional high courts entertained the writs and though the demand itself was not waived, the taxpayer got huge relief by way of setting aside or quashing that order. When the matter was remanded, the taxpayer had some breathing time and the tax official was bound to go by the directives of the high court. Now the high courts are disposing the writs by quoting the availability of alternate remedy with directions to the appellate authority not to reject appeal on limitation ground wherever applicable.

As the deadline for second appeal is still 30/06/2026 only for all old cases, the applicable limit of three months from order date is applicable for all first appeal orders dated on or after 01/04/2026 as well as cases disposed by high courts suggesting appeal to any appellate authority where such orders are passed post 01/04/2026.

Taxpayers/ tax professionals may kindly note that there is no total bar on writ remedy and writs are still maintainable in applicable situations as discussed above.