2025 (6) TMI 1952 - HC - GST

Tax liability in terms of Rule 28 Second Proviso of CGST Rules read with CBIC Circular No. 199/11/2023-GST dated 17th July 2023 - non-application of mind - violation of principles of natural justice - HELD THAT - It is relevant to note that the impugned order dated 31st January 2025 is appealable under Section 107 of the Central Goods and Services Tax Act 2017. Therefore the issues that are being raised by the Petitioner can also be considered by the Appellate Authority. While there can be no doubt that writ jurisdiction can be exercised in certain cases since this involves a detailed factual analysis testing the applicability of the said circular as also Rule 28 of CGST Rules to the facts this Court is not inclined to entertain the present writ petition. The Petitioner is permitted to approach the Appellate Authority under Section 107 within a period of 60 days. The specific contentions captured above shall be considered by the Appellate Authority without being influenced by the findings given in the impugned Order-in-Original. Petition disposed off.

Summary

The Delhi High Court, in W.P.(C) 3602/2025, addressed a petition under Articles 226 and 227 challenging the impugned Order-in-Original dated 31 January 2025, issued pursuant to a Show Cause Notice (SCN) dated 16 January 2023, which raised IGST demands against the Petitioner. The Court noted that the Order-in-Original and SCN were "almost identically worded," indicating the Additional Commissioner, CGST, Delhi East, "has not applied its mind." Although the Petitioner had filed a reply citing Rule 28 Second Proviso of CGST Rules and CBIC Circular No. 199/11/2023-GST (17 July 2023) to deny tax liability, the Order-in-Original failed to "deal with the same in an appropriate manner."The Court emphasized that the impugned order is appealable under Section 107 of the Central Goods and Services Tax Act, 2017, and since the matter requires "detailed factual analysis" regarding the applicability of the circular and Rule 28, it declined to exercise writ jurisdiction. The Petitioner was permitted to file an appeal within 60 days, with the direction that the Appellate Authority "shall consider the specific contentions... without being influenced by the findings given in the impugned Order-in-Original."Further, the Court stressed that GST Adjudicating Authorities must "take special note of the responses filed by the parties concerned and deal with the same appropriately and not simply reproduce the contentions in SCNs in their orders." The petition was disposed of accordingly, with directions for communication of the order to all GST Commissionerates for compliance.