Writ against GST Order not entertained; Assessee Relegated to Statutory Appeal u/s 107 despite Natural Justice Plea

Issue

Whether a Writ Petition under Article 226 is maintainable against an adjudication order alleging violation of natural justice (non-supply of documents and denial of cross-examination), or if the petitioner must exhaust the alternative statutory remedy of appeal under Section 107 of the CGST Act.

Facts

The Order: The Additional Commissioner passed an adjudication order confirming a GST demand, imposing an equivalent penalty, and appropriating seized cash.
Petitioner’s Grievance: The petitioner filed a writ petition directly before the High Court, arguing that the order was passed in violation of the principles of natural justice because:
1. Relied-upon documents were not supplied.
2. Opportunity for cross-examination was denied.
Legal Hurdle: A specific statutory remedy of appeal lies against such orders before the Appellate Authority under Section 107.

Decision

Alternative Remedy Rules: The High Court declined to adjudicate the matter on merits, adhering to the principle that when a statutory appeal mechanism exists, it should be exhausted first.
Liberty to Appeal: The petition was disposed of with liberty to the petitioner to file an appeal under Section 107 within 10 days.
Interim Protection: Crucially, to protect the petitioner during this transition, the Court ordered that no coercive action (recovery of dues) be taken against the petitioner until the Appellate Authority considers the stay application.
Ruling: The Writ was disposed of (technically in favour of Revenue regarding the forum, but granting interim protection to the assessee).

Key Takeaways

Appeal vs. Writ: High Courts are increasingly reluctant to entertain Writ Petitions in GST matters if a statutory appeal is available, even when “Violation of Natural Justice” is pleaded. Unless the error is glaring (e.g., order passed without any notice), the Court usually relegates the taxpayer to the appellate forum.

Section 75(4) Mandatory Hearing: While the Court sent this case back, remember that Section 75(4) mandates an opportunity of hearing. If cross-examination was denied, the Appellate Authority is bound to consider this as a procedural lapse and may remand the matter back to the Adjudicating Authority.

HIGH COURT OF PUNJAB AND HARYANA

Mannat Steels

Union of India

MRS. LISA GILL and Deepak Manchanda, JJ.

CWP No. 34077 of 2025

NOVEMBER 17, 2025

Abhinav Malhotra, learned counsel for the Petitioner. Prasanna Prasad, learned counsel for the Respondent.

ORDER

Vijay Kumar Shukla, J. – The present petition is filed under Article 226 and 227 of the Constitution of India challenging the order dated 12.08.2025 passed by the respondent no.2/Additional Commissioner, CGST and Central Excise Commissionerate, whereby demand of GST amounting to Rs. 53,29,13,310/-(Rupees Fifty three Crores, Twenty Nine Lakhs Thirteen Thousand, Three Hundred Ten only) (CGST- Rs.39,10,05,518/- and SGST- Rs. 7,09,53,896/-) and Penalty amounting to Rs. 53,29,13,310/- (Rupees Fifty three Crores Twenty Nine Lakhs, Thirteen Thousand Three Hundred Ten only) has been confirmed against the Petitioner. Further, the Respondent Authority has also directed appropriation of cash of Rs 66,43,130/- seized from the residential premises of the Petitioner.

2. Learned counsel for the respondent raises a preliminary objection that, against the impugned order, there is an alternative and efficacious remedy of appeal under section 107 of the CGST.

3. Learned counsel for the petitioner argued that the alternative bar is not an absolute bar for exercise of the jurisdiction under Article 226 of the Constitution of India, as the Adjudication Officer has not provided the documents and opportunity of cross-examination. In support of his submission, he has placed reliance on the judgment passed by the co-ordinate bench in the case of Paper Trade Links v. UOI GSTL 348 (Madhya Pradesh)/WP No.6061/2023 decided on 10.07.2025, where the court has entertained the writ petition.

4. Per contra, learned counsel for the respondent/state supported the impugned order and submitted that the petitioner was given sufficient opportunity to defend and therefore, the aforesaid judgment would not apply. He relied on the various judgments passed by the Apex Court to submit that if an alternative and efficacious remedy is available, then the writ petition cannot be entertained. He referred to the judgments passed by the Apex Court in the Hindustan Coca Cola Beverages (P.) Ltd. v. UOI GSTR 342/48 GST 95/ 308 ELT 433 (SC)/(2014) 15 SCC 44, Hameed Kanju v. Najim (2017) 8 SCC 611, Anshal Housing and Const. v. State of UP (2016) 13 SCC 305, Institute of Hotel Management v. UOI (2017) 11 SCC 72.

5. After hearing learned counsel for the parties and without adverting to the merits of the case, we deem it expedient to dispose of the present petition with liberty to the petitioner to file an appeal before the Appellate Authority within the period of 10 days from today alongwith the application for stay and if the said appeal is filed within the said period, the Appellate Authority shall consider and decide the application for stay as well as appeal expeditiously on merits in accordance with law.

6. Till the application for stay is considered by the Appellate Authority, no coercive action shall be taken against the petitioner in pursuant to the impugned order. If the appeal is not filed within 10 days as directed, the interim order shall automatically come to an end.

7. It is made clear that this Court has not passed any order on the merits of the case, and the Appellate Authority shall not be influenced by the order passed by this Court.

With the aforesaid, the present petition stands disposed of.