TaxTMI 
TaxTMI 
2025 (12) TMI 1657
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.... dated 25.09.2025 in Form GST DRC-01 ("DSCN", hereinafter referred to) for adjudication under Section 73 and levy of interest under Section 50 coupled with imposition of penalty under Section 122 of the Central Goods and Services Tax Act, 2017/the Odisha Goods and Services Tax Act, 2017 (for brevity, "GST Act"), and Summary of Show Cause Notice in Form GST DRC-01 dated 28.10.2025, the writ petition is filed with the prayer(s) for grant of following relief(s): "In the circumstances stated above, it is humbly prayed that this Hon'ble Court may be graciously pleased to: (a) Issue a Rule NISI in the nature of Writ of Mandamus and/or any other appropriate Writ/Writs calling upon the opposite parties along with records to show cause; (b) Issue Writ of Mandamus and/or any other appropriate Writ(s), by quashing the entire proceedings initiated under Section 73 of the Act, by issuing of impugned Show Cause Notices by the opposite party No. 1 in Annexure Nos. 1 & 1A Series; (c) Why the action of the opposite parties shall not be declared as illegal, unjust and flagrant violation of statute; (d) If the opposite parties fails to show cause or shows ....
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....d Sanction-Cum-Speaking Order in Form-GST-RFD-06, dated 23.08.2024, granting refund of Rs. 14,54,45,950/- comprising CGST: Rs. 7,27,22,975/-, OGST: Rs. 7,27,22,975 and IGST: NIL pertaining to the period 01.04.2022 to 31.03.2024 and also issued the Payment Order in Form GST RFD-05, dated 23.08.2024. 2.4. The Commissioner, Goods and Services Tax and Central Excise in view of provision contained in sub-section (2) of Section 107 of the GST Act examining the Refund Sanction-Cum-Speaking Order in Form-GST-RFD-06, dated 23.08.2024 passed by the Assistant Commissioner, Goods and Services Tax and Central Excise, Bhubaneswar-I Division vide Review Order dated 20.02.2025 observing that the refund claim of Rs. 14,54,45,950/- was erroneously granted in terms of proviso to Section 54 of the GST Act read with Rule 89 of the GST Rules, instructed as follows: "I, therefore, hereby authorize and direct the Assistant Commissioner GST & CX, Bhubaneswar-I Division, Bhubaneswar to file an appeal against the said order before the Additional Commissioner (Appeals), Goods and Services Tax and Central Excise, Bhubaneswar for: (a) Determining the correctness of the refund sanction order....
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....54(3) of the GST Act, it was observed that there is no prohibition to claim refund involving different tax periods. 2.6. After disposal of appeal filed at the behest of the GST Organisation, contemplating action under Section 73 of the GST Act, DSCN (Annexure-1) and Summary of Show Cause Notice (Annexure-1A) was served on the petitioner, being issued by the Joint Commissioner of GST and Central Excise, Bhubaneswar, wherein it has been stated thus: "In view of the above M/s. Auroglobal Comtrade Pvt. Ltd. Plot No.303/304, Satyanagar, Bhubaneswar, Khordha, Odisha - 751 007, (GSTIN: 21AAJCA0870E1Z7) are hereby required to reply to the show cause to the Joint/Additional Commissioner of GST and Central Tax, C.R. Building, Rajaswa Vihar, Bhubaneswar-751 007 within 30 days of receipt of this notice as to why: i. an amount of Rs. 14,54,45,950/- (Rupees Fourteen Crores Fifty four Lakhs Forty Five Thousand Nine hundred and Fifty only) (CGST: Rs. 7,27,22,975/-, SGST: Rs. 7,27,22,975/- & IGST: Rs. NIL), being the refund amount erroneously sanctioned and paid for the tax period from 01.04.2022 to 31.03.2024, should not be recovered in cash from them under the provisions of s....
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....DRC-01, dated 28.10.2025 without delving into the merit of the explanation/reply so rendered in response to DSCN. 2.9. Hence, this writ petition beseeching afore-mentioned relief(s) has been filed. Hearing: 3. On 11.12.2025 when the matter was listed for "Fresh Admission", Sri Sujan Kumar Roy Choudhury, Senior Standing Counsel (GST, Central Excise and Customs) appeared and prayed for an accommodation to enable him to seek instructions. 3.1. A written instruction as received by learned Senior Standing Counsel was placed before this Court, relevant portion of which reads as follows: "The Show Cause Notice dated 25.09.2025 was issued by the Joint Commissioner, GST & Central Excise, Bhubaneswar, for recovery of the erroneous refund pursuant to the review of the refund sanction order by the Commissioner, GST & Central Excise, Bhubaneswar, and the consequent issuance of the review order dated 20.02.2025. The said Show Cause Notice is not issued in consequence to the Order-in-Appeal dated 7.8.2025, rather is independent of, and has no nexus with, the outcome of the departmental appeal filed by the Assistant Commissioner, CGST & Central Excise, Bhubaneswar-1 Division. ....
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....und payment order to the extent indicated therein. 4.1. Upon review of said order under Section 107(2), a direction was issued for filing appeal, which, in fact, being filed came to be dismissed on consideration of merits by the Appellate Authority on 07.08.2025, thereby the Refund Sanction-cum-Speaking Order got affirmed. 4.2. Upon hearing both the sides, after such quasi judicial order being passed in appeal filed at the behest of the GST Organisation, in the garb of giving effect to Review Order of the Commissioner of CGST, the DSCN has been issued under Section 73 of the GST Act by the Joint Commissioner, Bhubaneswar Commissionerate. 4.3. It is submitted by Sri Pranaya Kishore Harichandan, learned Advocate that even though exhaustive reply with germane information was supplied to the Authority, a Summary Show Cause Notice has been issued apparently without considering the explanation of the petitioner. 4.4. Section 107(2)^1 of the GST Act empowered the Commissioner to direct subordinate authority to file appeal against order or decision on consideration of its legality or propriety. Said sub-section (2) of Section 107 explicitly mandates the Commissioner to examine ....
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....to do any act which will prejudicially affect the subject, then, although there are not two parties apart from the authority and the contest is between the authority proposing to do the act and the subject opposing it, the final determination of the authority will yet be a quasi-judicial act provided the authority is required by the statute to act judicially. 81. In other words, while the presence of two parties besides the deciding authority will prima facie, and in the absence of any other factor impose upon the authority the duty to act judicially, the absence of two such parties is not decisive in taking the act of the authority out of the category of quasi-judicial act if the authority is nevertheless required by the statute to act judicially.' 47. In Indian National Congress (I) Vrs. Institute of Social Welfare, (2002) 5 SCC 685 = (2002) 3 SCR 1040, this Court held that: '29. *** another test which distinguishes administrative function from quasi judicial function is, the authority who acts quasi judicially is required to act according to the rules, whereas the authority which acts administratively is dictated by the policy and expediency.' ....
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....n authority who will determine their respective rights. Further, the act of the Union Government establishing the OAT did not prejudicially affect the subject in any manner. Litigants or other citizens were not left without a forum. They could continue to pursue their remedies before the OAT when it was first established, instead of before the Orissa High Court." 4.7. It is well-settled that the High Court can, under Article 226 of the Constitution of India, interfere, if the action of an administrative authority or Tribunal is unfair or unreasonable or it defies the reasons. Where an administrative or quasi judicial authority acts in violation of the rules of natural justice, the High Court can set aside the said action. It may be worthwhile to refer to Mahadayal Premchandra Vrs. CTO, (1958) 9 STC 428 (SC) wherein it has been stated that the Commercial Tax Officer having passed the order merely voicing the opinion of the Assistant Commissioner without any conviction of his own, it can hardly be a satisfactory way of dealing with the matter. Since the authority did not exercise his own judgment in the matter and faithfully followed the instructions conveyed to him by the higher ....
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....al of the officer from service. In such a case filing an objection before the authorities would be an empty formality. Such a remedy available to the assessees cannot be considered, in the eye of law, as an effective alternative remedy. Though the statute prohibits the Commissioner from issue of any instructions which interferes with the discretion of the Appellate Authority, once such instructions are given, it is not reasonable to expect that even such Appellate Authorities who are subordinate to the Commissioner, would go against the instructions given by the Commissioner and take a view different to the one expressed by the Commissioner in his instructions circular. It is not appropriate for the Commissioner to interfere in the discretion of the taxing authorities for which they would fail in applying their mind independently. 4.11. Looked at the matter with the aforesaid perspective, the present case is classic example, where the Review Order of the Commissioner, i.e., an administrative decision whether to challenge the Refund Sanction Order in appeal in view of Section 107(2), is attempted to be justified by initiation of proceeding under Section 73 of the GST Act by the J....
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..... 28. In Comptroller and Auditor-General of India Vrs. K.S. Jagannathan, (1986) 2 SCC 679 = (1986) 2 SCC 679 = AIR 1987 SC 537, the Apex Court observed: '20. There is thus no doubt that the High Courts in India exercising their jurisdiction under Article 226 have the power to issue a writ of mandamus or a writ in the nature of mandamus or to pass orders and give necessary directions where the Government or a public authority has failed to exercise or has wrongly exercised the discretion conferred upon it by a statute or a rule or a policy decision of the Government or has exercised such discretion mala fide or on irrelevant considerations or by ignoring the relevant considerations and materials or in such a manner as to frustrate the object of conferring such direction or the policy for implementing which such discretion has been conferred. In all such cases and in any other fit and proper case a High Court can, in the exercise of its jurisdiction under Article 226, issue a writ of mandamus or a writ in the nature of mandamus or pass orders and give directions to compel the performance in a proper and lawful manner of the discretion conferred upon the Government o....
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....tributes these benefits and largesses. He is elected by the people and is elevated to a position where he holds a trust on behalf of the people. He has to deal with the people's property in a fair and just manner. He cannot commit breach of the trust reposed in him by the people In Onkar Lal Bajaj and Ors. Vrs. Union of India, (2003) 2 SCC 673, the Apex Court has summarised the cardinal principles of governance, which is as follows: 35. The expression 'public interest' or 'probity in governance' cannot be put in a straitjacket. 'Public interest' takes into its fold several factors. There cannot be any hard-and-fast rule to determine what is public interest. The circumstances in each case would determine whether Government action was taken in public interest or was taken to uphold probity in governance. 36. The role model for governance and decision taken thereof should manifest equity, fair play and justice. The cardinal principle of governance in a civilized society based on rule of law not only has to base a transparency but must create an impression that the decision making was motivated on the consideration of probity. The Government has to rise above the nexu....
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....ve of the label classifying that act, is in discharge of public duty meant ultimately for public good.' [See Shrilekha Vidyarthi (Kumari) Vs. State of U.P., (1991) 1 SCC 212] 'Public authorities should realise that in an era of transparency, previous practices of unwarranted secrecy have no longer a place. Accountability and prevention of corruption is possible only through transparency.' [See ICAI Vs. Shaunak H. Satya, (2011) 8 SCC 781] ***" 4.14. In Orissa Metaliks Pvt. Ltd. Vrs. State of Odisha, AIR 2021 Ori 85 the following is the observation: "There is also merit in the contention, based on the judgment of this Court in Rashmi Cement Ltd. Vrs. State of Odisha, 113 (2012) CLT 177, which in turn followed the judgment of the Supreme Court in Commissioner of Police Vrs. Gordhan Das Bhanji, AIR 1952 SC 16 that a quasi judicial authority vested with the power for cancellation of a license, could not have acted under the 'dictation' of another authority. Also the impugned action of suspension of the issuance of transit passes ought to have been preceded by an enquiry, that prima facie discloses wrong doing by Petitioner No. 1 in the form of violation of the terms....
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....ped in two main categories: failure to exercise a discretion, and excess or abuse of discretionary power. The two classes are not, however, mutually exclusive.'***" 4.16. In Union of India Vrs. Kamlakshi Finance Corporation Ltd., AIR 1992 SC 711 the Supreme Court had directed the department to adhere to the judicial discipline and give effect to the orders of higher appellate authorities which are binding on them. The relevant observations of made therein are required to be noted which read thus: "6. *** The High Court has, in our view, rightly criticised this conduct of the Assistant Collectors and the harassment to the assesse caused by the failure of these officers to give effect to the orders of authorities higher to them in the appellate hierarchy. It cannot be too vehemently emphasised that it is of utmost importance that, in disposing of the quasi judicial issues before them, revenue officers are bound by the decisions of the appellate authorities. The order of the Appellate Collector is binding on the Assistant Collectors working within his jurisdiction and the order of the Tribunal is binding upon the Assistant Collectors and the Appellate Collectors who functi....
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....r court.' 'Here the two things which are required to constitute appellate jurisdiction, are the existence of the relation of superior and inferior court and the power on the part of the former to review decisions of the latter. This has been well put by Story: 'The essential criterion of appellate jurisdiction is, that it revises and corrects the proceedings in a cause already instituted and does not create that cause. In reference to judicial Tribunals an appellate jurisdiction, therefore, necessarily implies that the subject-matter has been already instituted and acted upon by some other Court, whose judgment or proceedings are to be revised, (Section 1761, Commentaries on the Constitution of the United States).' ***" 4.18. In Orissa Forest Corporation Ltd. Vrs. Assistant Collector, 1982 SCC OnLine Ori 209 this Court made the following observation: "4. We do not think this should be the attitude of the Union Government. The demand is under the Statute and the statutory appellate authority, on the set of facts which are common both to the period when relief was granted and the period for which the impugned demand has been made, has already determined that no l....
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.... on a coordinate Bench which, failing the possibility of availing of either of these gateways, may yet differ with the view expressed and refer the matter to a Bench of superior strength or in some cases to a Bench of superior jurisdiction." 4.20. With such conspectus of legal perspective of sanctity attached to the Appellate Orders, it can be said in the present context that so long as the Order-in-Appeal passed by the Additional Commissioner-Appellate Authority vide Annexure-9 stands, the DSCN dated 25.09.2025 (Annexure-1) and Summary Show Cause Notice dated 28.10.2025 (Annexure-1A) issued by the Joint Commissioner, Bhubaneswar based on administrative decision vide Review Order dated 20.02.2025 raising the same issue which had already been adjudicated by the Appellate Authority on merit cannot be sustained. 4.21. Needless to say that the Review Order of the Commissioner directing the subordinate authority to file appeal being carried out it lost its force inasmuch as consequent upon filing of appeal, the same got disposed of. Regard being had to the legal position as to the effect of order passed in appeal on the subordinate authorities as discussed above, the Joint Commiss....
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...., have discharged their quasi judicial functions and duties being statutory functionaries. Thereafter now on the self-same issues which were considered by the Appellate Authority in appeal filed by the GST Organisation, the Joint Commissioner issued DSCN and Summary SCN exercising power under Section 73. The written instructions imparted to the learned Senior Standing Counsel reveals that the GST Organisation is still under process of exploring possibility to seek appellate remedy before the GSTAT. By adjudicating the issue of erroneous sanction of refund in pursuance of application made by the petitioner under Section 73 of the GST Act the Joint Commissioner cannot set the Appellate Order at naught, which is impermissible in law. 5.2. The aforesaid events and eventualities suggest that the GST Organisation is hell-bent to adjudicate the issues again which are settled by the Appellate Authority on facts based on evidence available on record. Glance at sub-section (16) of Section 107 makes it abundantly clear that "Every order passed under this section shall, subject to the provisions of Section 108 or Section 113 or Section 117 or Section 118 be final and binding on the parties"....
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....use of action. The parties then may not be bound by the determination made earlier if in the meanwhile, law has changed or has been interpreted differently by a higher forum.' 21. In The Doctrine of Res Judicata, 2nd Edn. by George Spencer Bower and Turner, it is stated: 'A judicial decision is deemed final, when it leaves nothing to be judicially determined or ascertained thereafter, in order to render it effective and capable of execution, and is absolute, complete, and certain, and when it is not lawfully subject to subsequent rescission, review, or modification by the tribunal which pronounced it. ***' 22. Reference, in this connection, may also be made to Ram Chandra Singh Vrs. Savitri Devi, (2003) 8 SCC 319. 23. Yet recently in Swamy Atmananda Vrs. Sri Ramakrishna Tapovanam, (2005) 10 SCC 51 in which one of us was a party, this Court observed: '26. The object and purport of the principle of res judicata as contended in Section 11 of the Code of Civil Procedure is to uphold the rule of conclusiveness of judgment, as to the points decided earlier of fact, or of law, or of fact and law, in every subsequent suit between the same partie....
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....upon which estoppel is based, public policy and justice have greater force in cause of action estoppel, the subject-matter of the two proceedings being identical, than they do in issue estoppel, where the subject-matter is different. Once it is accepted that different considerations apply to issue estoppel, it is hard to perceive any logical distinction between a point which was previously raised and decided and one which might have been but was not. Given that the further material which would have put an entirely different complexion on the point was at the earlier stage unknown to the party and could not by reasonable diligence have been discovered by him, it is hard to see why there should be a different result according to whether he decided not to take the point, thinking it hopeless, or argue it faintly without any real hope of success.' 25. In Gulabchand Chhotalal Parikh Vrs. State of Bombay, (1965) 2 SCR 547 = AIR 1965 SC 1153 the Constitution Bench held that the principle of res judicata is also applicable to subsequent suits where the same issues between the same parties had been decided in an earlier proceeding under Article 226 of the Constitution. 26.....
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....rs. State of Odisha, W.A. No.616 of 2025, vide Order dated 25.06.2025, succinctly explained the concept of "issue estoppel" by observing thus: "Furthermore, the Court cannot issue a writ of mandamus upon the authorities to act contrary to law nor the judicial discipline demands a departure from the earlier decision which attained finality. The principle of "issue estoppel" akin to "res judicata" has its applicability. If the issue which was directly and substantially an issue in the earlier proceeding has been decided by a competent Court, such issue cannot be re-agitated and/or decided by a Court in a subsequent proceeding. The contention of the appellant that the cause of action in the earlier writ petition and the cause of action in the subsequent writ petition are different, is unacceptable for the reason that the real issue involved in the litigation is whether the appellant, who admittedly crossed the outer age limit, may be permitted to offer the candidature in pursuance of the said recruitment process. Once the Court has decided that the appellant is not entitled to offer the candidature having crossed the outer age limit, even if in a subsequent writ petition the ....
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....r of the petitioner and after disposal of the appeal against the Revenue, the said Review Order is founded upon to issue Demand-cum-Show Cause Notice and Summary Show Cause Notice (Annexures-1 and 1A respectively) by the Joint Commissioner under Section 73 of the GST Act. 5.7. On the principles of res judicata and issue estoppel propounded by the Courts referred to supra, being conscious of what has been exposited in BSNL Vrs. Union of India, (2006) 3 SCC 1, as the issue of grant of refund by the Assistant Commissioner got finally decided in the Appeal with respect to sanction of refund on computation of eligible input tax credit, the recourse to adjudicate upon the same objection/content under Section 73 without giving due deference to the quasi judicial Appellate Order is unconscionable. 6. In the wake of above discussions and analysis of legal perspective, the Demand-cum-Show Cause Notice dated 25.09.2025 in Form GST DRC-1 issued by the Joint Commissioner Goods and Services Tax and Central Excise, Bhubaneswar Commissionerate, Bhubaneswar (opposite party No. 1) vide Annexure-1 and the Summary Show Cause Notice dated 28.10.2025 in Form GST DRC-01 vide Annexure-1A contemplati....