Writ petition is dismissed as an available statutory appeal allows

Writ petition is dismissed as an available statutory appeal allows full re-appreciation of evidence.

Issue

Whether a writ petition under Article 226 challenging a Central GST Order-in-Original passed under Section 74 is maintainable when an alternative, efficacious statutory appeal exists under Section 107, even if the taxpayer alleges a violation of Section 6(2)(b) due to a prior State GST closure under Section 73 and asserts a denial of an adequate hearing.

Facts

Challenge to Order: The petitioner filed a writ petition to challenge an Order-in-Original passed by the Central GST authorities under Section 74 of the CGST/DGST Act.
Bar Invoked: The petitioner argued that the Central GST proceedings were barred under Section 6(2)(b) because the State GST authorities had previously closed proceedings on the same subject matter under Section 73.
Allegations of Unfairness: The petitioner further contended that the adjudicating authority denied them an adequate opportunity to be heard and completely misappreciated the evidence brought on record.
Revenue’s Objection: The respondent department raised a primary objection regarding the maintainability of the writ, stating that the petitioner had skipped an alternative, efficacious statutory remedy where factual grievances could be fully addressed.

Decision

Distinct Legal Arenas: The High Court held that Section 73 and Section 74 operate in entirely distinct legal fields, and a mere closure or exoneration under Section 73 does not automatically block subsequent actions initiated under Section 74.
Plenary Powers of Appellate Authority: The court observed that the statutory appellate authority under Section 107 holds wide powers to thoroughly re-appreciate existing evidence and permit the introduction of new or additional evidence.
Pre-Deposit Justifies No Bypass: The court ruled that the mandatory requirement of a statutory pre-deposit to file an appeal cannot be used as a valid excuse or justification by a taxpayer to bypass the prescribed appellate route.
Petition Dismissed: Since the statutory appeal route provides an adequate platform to resolve factual disputes and evidence-related errors, extraordinary writ jurisdiction was denied, and the petition was dismissed in favor of the Revenue.

Key Takeaways

Writ Barred by Fact-Finding Remedy: High Courts will not entertain writ petitions to correct errors in evidence appreciation or procedural hearing gaps when a statutory appellate tribunal or authority is fully empowered to review those exact factual disputes.

Distinctive Scope of Sections 73 and 74: A prior administrative closure under Section 73 (covering non-fraud cases) does not create an automatic statutory bar against a distinct, deeper investigation initiated under Section 74 (covering fraud, willful misstatement, or suppression of facts).

Pre-Deposit is Mandatory, Not Onorous: The financial condition requiring a pre-deposit for a GST appeal is a legislative mandate and does not constitute an “undue hardship” that allows a taxpayer to leapfrog directly into constitutional writ proceedings.

HIGH COURT OF DELHI

PEI Industries

v.

Union of India^*

NITIN WASUDEO SAMBRE and Ajay Digpaul, JJ.

W.P. (C) No. 7725 of 2026
CM APPL. No. 37364 of 2026

MAY 29, 2026

Anurag Kishore, Lakhan Kr. Mishra and Ms. Ritika Srivastava, Advs. for the Petitioner. Abhishek Maratha, Sr. Panel Counsel, Ms Nupur Sharma, Ms. Priyanka Jindal and Sumit K. Batra, Advs. for the Respondent.

JUDGMENT

Nitin Wasudeo Sambre, J.- Heard.

2. The Order in Original dated 30^th March, 2026 is questioned by the petitioner on the ground that proceedings are barred under Section 6(2)(b) of the CGST Act, 2017 (hereinafter shall be referred to as ‘the Act’). Drawing support from order of the State GST Authorities, in exercise of powers under section 73 of the Act, it is the contention of counsel for petitioner that on the very same set of documents, the State GST Authorities have closed the proceedings. It is further urged that the proceedings under Section 74 of the Act are initiated by the respondent-Central GST Authorities based on very same set of evidence. It is urged that though the petitioner has provided set of documents, which were formed to be the basis for closure of the proceedings under Section 73 of the Act by the State GST Authorities, the respondent-Central GST Authorities have refused to accept the same. He would further urge that the additional documents which the respondents were intending to obtain from the petitioner, no notices to that effect was given to him. As such, it is urged that not only the order is discriminatory viz. violation of Article 14, but also violates the rights of petitioner as the petitioner is treated indiscriminately. It is also urged that out of the four dates for personal hearing as noted in the impugned order, the hearing was granted only on two days. It is the contention of learned counsel for petitioner that even the documents which were produced have been inappropriately appreciated. Writ petition

3. As against above, learned counsel for respondents have raised a preliminary objection on account of maintainability of the petition as it is urged that Statute provides for an alternate effective remedy. It is urged that proceedings under Section 73 and 74 of the Act are conducted in an altogether different arena. So as to substantiate said contention, reliance is placed on the language employed in each of these two sections.

4. According to learned counsel for respondents, appreciation of evidence is an issue which can be borne into by the Appellate Authority and this Court should not infer from the factual matrix which are referred to in the impugned order and the evidence thereof, to claim that it is open for the Court to reappreciate the evidence. According to him, same shall be left to the discretion of the Appellate Authority.

5. It is further urged that the hearing was granted and a speaking order is passed in the matter and, merely, because appreciation of evidence is not to the comfort of petitioner, that by itself, will not lead to the conclusion that the evidence has been inappropriately appreciated. As such, dismissal of petition is sought.

6. Learned counsel for petitioner, in rejoinder, states that in case if the petitioner is relegated to alternate statutory remedy, he will be burdened with payment of statutory pre-deposit.

7. Having appreciated aforesaid submissions, we have looked into the claim put forth by petitioner.

8. Amongst other, it is the contention of the petitioner that order passed by State GST Authorities under Section 73 of the Act was duly looked into in light of the other documents which were submitted by petitioner in response to the Show Cause Notice and the respondents have passed an indifferent order than the order passed by State GST Authorities based on the very same set of documents. It is further urged by him that the petitioner should have been given an opportunity to produce additional documents so as to substantiate the claim made.

9. It is apparent that Section 73 and Section 74 of the Act operates in different arenas. The language of said sections, recourse to be taken in regard to said sections, can very well be looked into by its face value.

10. Just because the petitioner was exonerated in the proceedings under Section 73, by itself, cannot lead to the petitioner being proceeded against by the Central GST Authorities under Section 74 of the Act. Both these sections operate on altogether different considerations.

11. Apart from above, the material that was placed on record by petitioner in response to Show Cause Notice is very much independently available for scrutiny and appreciation.

12. In addition to above, learned counsel for petitioner has stated that once the material produced on record was found to be sufficient by State GST Authorities, it was binding on the Central GST Authorities to take the same into account for closure of proceedings under Section 74 of the Act.

13. Appreciation, re-appreciation of evidence in regard to same are vested with the competent authorities. It is not in dispute that jurisdiction of Appellate Authority is restricted, rather it can be inferred from the very language of the jurisdiction vested in the Appellate Authority that it can reappreciate the entire evidence and if so required, may permit the petitioner to produce additional evidence.

14. Merely because the petitioner shall be burdened with the satisfaction of condition of statutory pre-deposit, that by itself, cannot give leverage to the petitioner to claim before this Court that inappropriate appreciation of evidence or non-grant of sufficient opportunity to produce additional evidence to the satisfaction, amounts to denial of personal hearing. Re-appreciation and production of additional evidence can be very well looked into by the Appellate Authority.

15. In that eventuality, we see no reason to exercise writ jurisdiction in the present matter, particularly, when the proceedings are barred by statutory remedy of appeal.

16. As such, the petition stands dismissed.

17. Pending application, if any, also stands dismissed accordingly.

18. Let the appeal, if any preferred by the petitioner, be dealt with on its own merits.

19. A copy of this Judgment be uploaded on the website of this Court.