High Court Dismisses Writ Challenge Against Section 74

High Court Dismisses Writ Challenge Against Section 74 Adjudication Order Where Alternative Appellate Remedy Exists

Issue

Whether the High Court should exercise its extraordinary writ jurisdiction under Article 226 against a Section 74 adjudication order involving factual disputes over portal data verification and parallel proceeding bars under Section 6 when an efficacious statutory appellate remedy is available.

Facts

Period & Order: The proceedings pertain to an adjudication order passed under Section 74 by the State GST authority for Financial Year 2018-19.
Petitioner’s Allegations: The petitioner challenged the order via a writ petition, claiming that:
1. Central GST authorities had previously initiated proceedings for the same period using the same material, attracting the statutory bar against parallel proceedings under Section 6.
2. The State authority relied solely on common portal data without independent physical or factual verification.
State’s Defense: The State GST authority contended that:
1. The State proceedings were restricted to three specific suppliers that were excluded from the Central proceedings, meaning no overlap or Section 6 bar existed.
2. Information from the portal had been shared, and the writ petition was not maintainable due to the availability of an efficacious statutory appellate remedy.

Decision

Factual Examination Required: The High Court held that the issues raised required detailed factual examination and verification of supplier-wise records, which cannot be undertaken in extraordinary writ jurisdiction [Paras 6, 7].
Alternative Remedy Bar: Since an efficacious statutory appellate remedy exists against the Section 74 adjudication order, the High Court declined to entertain the writ petition [Para 9].
Weak Foundation on Section 6 Bar: The petitioner’s objection regarding the Section 6 coordination bar stood on a weaker footing because the State proceeded only with respect to three suppliers not covered by the Central action [Paras 6, 7].
Liberty to File Appeal: The Court concluded that all such factual and legal issues regarding supplier overlaps can be properly examined before the Appellate Authority, deciding the writ petition in favour of the Revenue [Para 9].

Key Takeaways

Exhaustion of Statutory Remedies: High Courts will generally refrain from exercising Article 226 writ jurisdiction against adjudication orders when complex factual determinations are involved and an alternative appellate remedy is available.
Scope of Parallel Proceeding Bar: The Section 6 bar on parallel proceedings is strictly applicable only where Central and State actions cover the exact same subject matter or suppliers; proceedings restricted to distinct or non-overlapping entities remain valid.
Factual Disputes to Be Assailed in Appeal: Allegations concerning non-verification of portal data or improper consideration of replies are grounds for statutory appeal rather than direct writ intervention.

HIGH COURT OF ALLAHABAD

Hari Om Udyog

State of U.P.

Saumitra Dayal Singh and Swarupama Chaturvedi, JJ.

WRIT TAX No. 1680 of 2026

MAY 21, 2026

Suyash Agarwal for the Petitioner. Dhananjay Awasthi, Saumitra Singh and Ankur Agarwal for the Respondent.

ORDER

1. Heard learned counsel for the petitioner, learned counsel for the U.P. GST Authority and learned counsel for the revenue.

2. Challenge has been raised to the order dated 03.12.2025 passed by respondent no. 4 for the Financial Year 2018-2019, with respect to proceeding under section 74 of the U.P. GST Act, 2017.

3. Two fold submission have been advanced. First, proceedings having been earlier initiated under the CGST Act, 2017 by the Central GST Authority, the State GST Authority may not have any jurisdiction to initiate any further proceedings in respect to the same tax period and the same material, in view of the provisions under section 6(2)(b) of the State and the Central GST Act. Second, it has been vehemently urged, in any case there is no material available with the State GST Authority to initiate such provisions. At most, they have downloaded certain information from the common portal. Without verifying the same proceedings may have been drawn up. That is contrary to the law.

4. On the other hand, learned Standing Counsel for the State GST Authority submits, against information received with respect to 14 suppliers, proceedings were dropped with respect to 11 such suppliers, by the DGGI. With respect to remaining 3, M/S Sai Nath Traders, Om Traders and Bharat Trading Company, no proceedings were ever drawn by the Central GST Authority. Therefore, bar of section 6(2)(b) of the State Act and the Central Act does not apply.

5. On the issue of existence of information, it has been submitted, that the objection is subjective. Information as is available on the common portal has also been made known to the petitioner. Finer details of the same may be raised, if required, be raised before the appeal forum.

6. Having heard the learned counsel for the parties and having perused the record, to the extent, no firm conclusion is possible to be drawn, if adequate information is available to the adjudicating authority to confirm the demand, and to the extent, such fact issue is not necessary to be gone into in writ proceedings, in face of statutory remedy of appeal available to the petitioner, we decline to exercise our extraordinary jurisdiction under Article 226 of the Constitution of India, in the present facts.

7. As to the objection raised on the strength of section 6(2)(b) of the CGST Act, the case of the petitioner stand on lessor footing inasmuch as according the State, it is only proceeding with respect to 3 suppliers, with respect to whom no proceedings may have been drawn by the CGST Authority. That issue may also be examined in detail, in appeal proceedings that the petitioner may undertake. Accordingly, interference claimed is declined, at this stage.

8. Then, learned counsel for the petitioner states, in view of the writ petition having remained pending for more than two months, liberty may be grated to the petitioner to file its statutory appeal, within reasonable time. To that there is no objection.

9. Accordingly, the writ petition is disposed of with the observation, subject to the petitioner filing statutory appeal against the impugned order within a period of two weeks from today, the same may be entertained on merits without raising any objection as to the limitation.