TaxTMI 
TaxTMI 
2026 (9) TMI 172
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....Assistant Commissioner, CGST Div-Nehru Place, Delhi East Commissionerate. 2. At the outset, it deserves notice that the Impugned Order is appealable under Section 107 of the CGST Act. The appellate remedy so provided constitutes a complete, efficacious and comprehensive statutory mechanism for redressal of grievances arising from orders of adjudication. 3. The Appellate Authority is vested with wide powers to examine both questions of fact and law, re-appreciate the material placed on record, scrutinise the findings returned by the adjudicating authority, and determine the legality as well as the correctness of the order under challenge. It is for this reason that where the legislature has consciously created a specialised adjudicatory framework coupled with a hierarchy of appellate remedies, constitutional courts have consistently exercised restraint in entertaining a challenge to the original adjudication order under Article 226 of the Constitution. Such self-imposed restraint is founded not upon any lack of jurisdiction, but upon sound principles governing the exercise of judicial discretion. 4. Questions involving appreciation of evidence, adequacy of material, correct....
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....ing to conduct an audit under Section 65 of the CGST Act for the period from July, 2017 to March, 2022. The Petitioner furnished documents and information in response to the said notice on 20.12.2023, 26.12.2023 and 13.01.2024. 10. Thereafter, an audit memo dated 01.02.2024 was issued raising various discrepancies relating, inter alia, to availment of input tax credit (ITC), payment of tax under Reverse Charge Mechanism (RCM) and other transactions. The Petitioner submitted a Reply/Clarification dated 15.02.2024 along with supporting documents. 11. A further audit memo dated 26.03.2024 was issued raising, inter alia, allegations concerning ITC, RCM, supplies made to certain suppliers, export transactions and other issues. The Petitioner submitted Replies dated 30.03.2024 and 26.04.2024 thereto. 12. On 26.06.2024, the Respondents issued Form GST ADT-02 under Section 65(6) of the CGST Act raising audit objections involving a tax liability of approximately Rs. 78,53,548/-, excluding interest. The Petitioner disputes the said audit findings and contends that the Replies and supporting documents furnished during the audit were not duly considered. 13. On 08.07.2024, Form GST....
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....ients of fraud, wilful misstatement or suppression of facts with intent to evade tax. ii. A single SCN could not have been issued covering the financial years 2017-18 to 2021-22, since the statutory scheme contemplates separate limitation periods and separate determination for each financial year. iii. The audit proceedings and the consequential Audit Report in Form ADT-02 are vitiated since the Replies and documents furnished by the Petitioner were not considered before the audit was concluded and the SCN was issued. iv. The Impugned Order is liable to be set aside for failure to consider the detailed Reply submitted by the Petitioner and the documents placed on record, including DRC-03s evidencing payment/reversal of the amounts in question. v. The findings returned in respect of the individual heads of demand, including inadmissible ITC, ITC allegedly availed from cancelled suppliers, excess ITC, short payment under RCM, ITC allegedly blocked under Section 17(5), place of supply and the alleged non-compliance with Rule 96A, are contrary to the material placed on record. vi. The proceedings are consequently vitiated by violation of the....
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.....02.2025. The challenge, as it presently survives, therefore, encompasses not merely the initiation of proceedings under Section 74 of the CGST Act but also the findings and conclusions returned by the adjudicating authority in the Impugned Order. 26. It is, therefore, necessary to examine whether the aforesaid grounds disclose any circumstance falling within the recognised exceptions to the rule of alternative remedy, or whether the grievances raised by the Petitioner are matters which are required to be agitated before the statutory appellate authority. 27. The first contention advanced on behalf of the Petitioner is that the SCN could not have been issued under Section 74 of the CGST Act as it does not disclose the requisite ingredients of fraud, wilful misstatement or suppression of facts with intent to evade tax. It is contended that the allegations essentially arise from discrepancies noticed during audit and are not supported by any material establishing the ingredients contemplated under Section 74 of the CGST Act. 28. The aforesaid objection was specifically raised by the Petitioner before the adjudicating authority. The Impugned Order notices the said submission ....
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....rder. 32. The distinction is material. The fact that the limitation prescribed under Sections 73(10) and 74(10) is computed with reference to the financial year does not, by itself, impose a requirement that a separate SCN must necessarily be issued for each financial year. As held in Ambika Traders (supra), the statutory language contemplates a notice relating to a period which may extend beyond one financial year. The Court further observed that, particularly in cases involving alleged fraudulent availment or utilisation of ITC, transactions spread across different financial years may be required to be examined together to ascertain the alleged pattern of fraud or suppression. Accordingly, the mere issuance of a consolidated SCN covering multiple financial years does not constitute a patent lack of jurisdiction so as to warrant interference under Article 226 of the Constitution. Any contention that the demand pertaining to a particular financial year is barred by the limitation prescribed under Section 74(10) is a distinct issue, which may be examined in the statutory appeal on the basis of the relevant dates and the period to which the demand relates 33. The Petitioner has....
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....-03s, reconciliations, invoices, bank statements and documents relating to exports. 37. The Impugned Order, however, records the submissions of the Petitioner and deals with the objections raised during the adjudication proceedings. Whether the findings returned therein correctly appreciate the documents and explanations furnished by the Petitioner, or whether the material relied upon by the Petitioner warranted a different conclusion, is a matter concerning the merits of the adjudication. Such issues are appropriately amenable to examination in appeal and do not, in the circumstances of the present case, warrant interference in writ jurisdiction. 38. Learned counsel representing the Petitioner has also assailed the findings returned in respect of the individual heads of demand, contending that certain amounts had already been paid or reversed through DRC-03, certain ITC had either not been availed or was otherwise admissible, the alleged RCM liability stood discharged, and the export transactions were duly supported by invoices, returns and proof of realisation. 39. These submissions essentially challenge the factual findings and computation of liability under the respect....