2025 (8) TMI 1389 - HC - GST

Writ jurisdiction unsuitable for adjudicating multiple differing orders; file six appeals under s.107 CGST by Sept 30, 2025

Nitin Gupta Proprietor Shree International Versus The Union Of India & Anr.

Nitin Gupta Proprietor Shree International Versus The Union Of India & Anr. - 2025:DHC:7198 - DB 1. ISSUES PRESENTED AND CONSIDERED 1. Whether multiple adjudication orders (Orders-in-Original) can be challenged in the same writ petition after the statutory period for appeal under Section 107 of the CGST Act, 2017 has elapsed. 2. Whether the Central Board of Indirect Taxes & Customs (CBIC) circular dated 6 July 2022 precludes raising demand under Section 74 of the CGST Act, 2017 and limits penal consequences to Section 122, contingent on whether there was actual supply of goods or services. 3. Whether overlapping suppliers and overlapping transactions across multiple adjudication orders require a single consolidated adjudication order or determination by a single proper officer. 4. Whether writ jurisdiction is appropriate for adjudication of disputed factual matrices involving multiple noticees and complex input tax credit (ITC) pass-on issues, and the attendant consequences concerning pre-deposit requirements for entertaining relief. 5. Whether, in the circumstances, leave should be granted to file appeals against the impugned orders despite delay and whether pre-deposit should be directed (and if so, to what extent), and whether existing deposits should be credited. 2. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Multiple orders challenged in same writ petition after limitation Legal framework: Writ jurisdiction under Articles 226/227 of the Constitution of India; statutory appellate remedy under Section 107, CGST Act, 2017; principles of exhaustion of alternative statutory remedies and limitation for filing appeals. Precedent Treatment: No specific precedents were invoked or relied upon by the Court in the reasons delivered; the Court applied established principles limiting writ intervention where effective statutory remedy exists. Interpretation and reasoning: The Court observed that the impugned adjudication orders involve multiple noticees and differing factual matrices; therefore, the correctness of the orders and related contentions are more appropriately examined in the statutory appellate process rather than by writ. The existence of alternate remedy under Section 107 and the factual complexity militated against entertaining comprehensive adjudication in writ jurisdiction. Ratio vs. Obiter: Ratio - Where effective statutory remedy exists and adjudication requires detailed factual enquiry across numerous parties and transactions, writ jurisdiction is not the appropriate forum to substitute appellate adjudication. Conclusions: The Court held that contentions raised can and should be ventilated in appeals under Section 107; petitioner permitted to file individual appeals against each impugned order (six appeals), rather than seeking merits determination in writ jurisdiction. Issue 2 - Effect and scope of CBIC circular dated 6 July 2022 re Section 74 vs Section 122 Legal framework: Provisions of Section 74 (tax evasion by suppression or contravention) and Section 122 (penalty provisions) of the CGST Act, 2017; CBIC circular (administrative guidance) interpreting enforcement approach. Precedent Treatment: The Court noted submissions regarding the circular but did not treat it as supplanting statutory provisions; the CBIC was impleaded to assist on interpretation. The circular was characterized (by respondent) as reiterative of existing law rather than laying down new mandates. Interpretation and reasoning: The Court queried whether the petitioner's case was premised on actual supply or on non-supply/phantom transactions because application of the circular depends on that factual position. The Court recorded that resolution of this issue requires factual analysis of supplies and transactions as recorded in the adjudication records and thus is suited to appellate adjudication rather than writ forum. The CBIC's contention that the circular reiterates the law was noted; the petitioner's contention that Section 74 could not be invoked and only penalty under Section 122 was permissible was left to be examined on appeal. Ratio vs. Obiter: Obiter - The Court did not lay down a new legal test for the circular's operation; it left the ultimate interpretation to appellate adjudication after factual determination of whether actual supply took place. Conclusions: The Court declined to decide the legal import of the circular in the writ; resolution of whether Section 74 was appropriately invoked requires factual determination (actual supply vs no supply) and is to be decided in the appellate process. Issue 3 - Necessity of consolidated adjudication / single proper officer in cases of overlapping suppliers/transactions Legal framework: Principles governing jurisdiction and proper officer under the CGST scheme; administrative practicality in adjudication where multiple noticees and varying roles (supplier, recipient, ITC availer) exist. Precedent Treatment: No specific authority was cited; the Court applied practical and factual reasoning about multiplicity of parties and individualized liability. Interpretation and reasoning: The Court observed that impugned orders do not concern only the petitioner but many other persons (suppliers and ITC availers). Different orders address different parties, tax periods, and fact situations. Given the multiplicity (ranging from 27 to over 1,000 noticees across orders) and differing factual contexts, a single consolidated adjudication focused solely on the petitioner is neither feasible nor mandated. Determination of proper officer cannot be made by reference to a single noticee when investigations and implicated parties span different units and commissionerates; any commissionerate that commences investigation may be properly designated depending on scope. Ratio vs. Obiter: Ratio - Overlapping suppliers do not ipso facto require a single consolidated adjudication or single proper officer where multiple distinct noticees and diverging fact situations exist; separate adjudications by different proper officers may be justified. Conclusions: The contention that a common adjudication order should have been passed and that the impugned orders were invalid for being passed by different proper officers was rejected as untenable on the material before the Court; such contentions are permitted to be raised on appeal. Issue 4 - Appropriateness of writ jurisdiction given factual complexity and need for pre-deposit Legal framework: Jurisdictional doctrine restricting writ interference where appellate/statutory remedies exist; CGST Act provisions regarding pre-deposit for filing appeals; principles allowing limited writ relief where exceptional circumstances exist. Precedent Treatment: No precedents were cited; the Court applied canonical administrative law principles about forum and remedy. Interpretation and reasoning: The Court concluded that adjudication and the petitioner's grounds require detailed factual analysis across a maze of transactions set out in different impugned orders; such fact-driven scrutiny is unsuitable for writ adjudication. Nonetheless, the Court recognized prima facie overlapping in transactions and suppliers but found that this did not justify extinguishing the statutory appellate route. Because the petition seeks relief impinging on revenue demands, the Court considered pre-deposit principles and directed pre-deposit for the largest demand order as a condition for entertaining appeals. Ratio vs. Obiter: Ratio - Writ jurisdiction is not the appropriate forum for detailed factual resolution of complex, multi-party GST adjudications; pre-deposit conditions for entertaining statutory appeals remain applicable and may be tailored by the Court. Conclusions: The petition was not entertained on merits; the petitioner was directed to pursue appeals, with pre-deposit obligations imposed selectively (see Issue 5). Issue 5 - Direction on appeals, pre-deposit, credit for amounts already deposited, and refusal to reject appeals on limitation if filed within specified period Legal framework: Appellate mechanism under Section 107 CGST Act, 2017; statutory and judicial practice permitting conditional extension for filing appeals in revenue matters; pre-deposit requirements as condition for stay/entertainment of appeals. Precedent Treatment: The Court exercised discretion consistent with practice of allowing appeals to be filed within a limited period and directing pre-deposit to balance revenue interests and right to appeal; no novel precedent was laid down. Interpretation and reasoning: Given the large demands and overlapping transactions, the Court permitted the filing of six individual appeals by a specified date and directed pre-deposit only in respect of the order involving the largest demand (quantified in the record). The Court acknowledged an existing deposit made by the petitioner and directed that the same be credited toward the pre-deposit requirement for that order. The Court further directed that appeals filed by the specified date shall be adjudicated on merits and not rejected on the ground of limitation; however, observations made are not to prejudice the outcome and all rights and contentions are left open. Ratio vs. Obiter: Ratio - The Court may permit condonation or acceptance of appeals filed within a limited timeframe and can tailor pre-deposit obligations (including crediting prior deposits) where the balance of convenience and interests of revenue requires it; such directions do not determine merits and preserve parties' rights. Conclusions: Petitioner permitted to file six appeals by the date directed; pre-deposit directed only for the largest-demand order with credit for prior deposit; appeals filed within the time directed shall be adjudicated on merits and not rejected on limitation grounds; substantive issues remain open for appellate adjudication.