Writ dismissed for inordinate delay; Section 107 CGST appeal period lapsed, findings of supplier collusion and fraudulent ITC

Writ petition dismissed by HC. Court held the petition was inordinate or unexplainedly delayed; the statutory period for appeal under Section 107 CGST had lapsed, so impugned order became final. Alleged non-hearing did not amount to complete violation of natural justice because petitioner's replies and documents were considered. Evidence was insufficient to show the supplier's existence or rebut the show-cause notice; findings pointed to collusion and fraudulent availment of ITC causing revenue loss. No exceptional circumstances justified relief; interference was refused.

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Issues: (i) Whether the writ petition against the adjudicating order confirming demand and penalty for alleged fraudulent ITC can be entertained despite no appeal having been filed within the period prescribed under Section 107 of the CGST Act; (ii) Whether there was breach of the principles of natural justice in the adjudication.

Issue (i): Whether the petition can be entertained notwithstanding expiry of the appeal period under Section 107 of the CGST Act.

Analysis: The Court analysed the statutory limitation under Section 107(4) CGST Act which prescribes a three-month period with one-month extension and excludes general condonation principles. The petitioner did not file an appeal within the statutory period and provided no exceptional circumstances warranting extension. Precedents and principles on exclusion of the Limitation Act and the restricted scope for writ jurisdiction where an alternate statutory remedy exists were considered.

Conclusion: The petition is barred by limitation and the impugned adjudicating order has attained finality; the writ petition cannot be entertained and the petitioner is relegated to the statutory appellate remedy. This conclusion is adverse to the petitioner and in favour of the Revenue.

Issue (ii): Whether there was a violation of the principles of natural justice in the adjudication proceedings.

Analysis: The Court examined service of the show-cause notice, the filed replies and documents, and the adjudicating authority's record of opportunities for personal hearing. The acknowledgement of filed documents was noted and the material showed the petitioner had the chance to present its case but did not substantively rebut allegations of bogus supplier transactions or explain supplier existence.

Conclusion: No breach of the principles of natural justice was established; the adjudication proceeded after opportunities were afforded and considered. This conclusion is adverse to the petitioner and in favour of the Revenue.

Final Conclusion: The writ petition is dismissed; the impugned order confirming demand, recovery and penalty in respect of fraudulent ITC stands final and the petitioner has not demonstrated exceptional circumstances to justify interference by writ jurisdiction.

Ratio Decidendi: Where a statute (Section 107 CGST Act) prescribes a specific, limited period for appeal and a single short extension, the statutory timeline excludes general condonation under the Limitation Act and a writ petition will not be entertained in the absence of exceptional circumstances such as a complete denial of natural justice.

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