GST UPDATE

Writ Petition No.:7725 of 2026

Court: High Court of Delhi

Case Title: M/s PEI Industries and various Ors v. Union of India & Ors.

Outcome:Writ Petition was dismissed

Judgement Date: 29.05.2026

BRIEF FACTS OF THE CASE:

Proceedings were initiated by the SGST officials under Section 73 in the case of M/s PEI Industries (petitioner) which was later dropped after consideration of the documents submitted in defence by the petitioner. Later, on the same subject matter and on the basis of the documents produced before the SGST authorities, CGST authorities initiated proceedings under Section 74 of CGST Act show cause notice which was confirmed by passing an order-in-original. Being aggrieved by the order, the petitioner preferred a writ petition.

QUESTION BEFORE HON’BLE COURT:

Whether CGST authorities can validly initiate proceedings u/s 74 on the same subject matter by relying upon the documents/evidence produced before the SGST authorities, relying upon which the proceedings u/s 73 were dropped by the SGST authorities?
Whether a writ petition under Article 226 of the Constitution should be entertained against the adjudication order when the petitioner had an effective statutory appellate remedy under the GST law?

BRIEF ARGUMENTS BY PETITIONER:
Petitioner submitted following contentions: -

It was argued that the proceedings are barred as per Section 6(2)(b) of the CGST Act 2017 as the State GST authorities have already concluded the proceedings on the mirror/same subject matter based on the exactly same documents.
Furthermore, that the proceedings under Section 74 of the CGST Act have been initiated on the same set of evidences by the CGST authorities.
In continuation of above, that the CGST authorities have denied to entertain the set of documents which were produced before the SGST authorities on the basis of which proceedings were dropped by the SGST authorities.
Furthermore, that hearing was granted only on two days in spite of the fact that there were four dates mentioned in the impugned order.
In the rejoinder, the petitioners submitted that if they were relegated to the appellate remedy, they would have to bear the burden of mandatory pre-deposit, which would cause hardship.

Therefore, impugned order should be set aside.

BRIEF ARGUMENTS BY REVENUE DEPARTMENT:

Revenue Department contended that:

Writ is not maintainable as there is alternate statutory remedy available to the petitioner.
Furthermore, that proceedings under Section 73 and Section 74 are conducted in an altogether different zone. For this, reliance was placed upon the language used in both the sections. Along with that, it cannot be held that the petitioner cannot be proceeded with Section 74 merely because the petitioner got relief from the Section 73 proceedings of the SGST, as both the sections operate altogether differently.
The reply of show cause notice given by the petitioner to the SGST authorities is very much available independently for scrutiny and consideration.
That the Court should leave on the Appellate Authority to look into the evidence and the Court should not conclude from the facts.
It was also submitted that adequate opportunity of hearing had been granted and a speaking order had been passed after considering the material on record.
The writ preferred by the petitioner shall not be allowed merely due to the fact that the petitioner will be burdened with the satisfaction of condition of statutory pre-deposit and that the appeal should have been preferred.
Merely because the findings recorded by the adjudicating authority were not to the satisfaction of the petitioners, it could not be said that the evidence had been improperly appreciated or that principles of natural justice had been violated.

FINDINGS & JUDGEMENT:

Following are the findings of the Court in the instant case:

The Delhi High Court held that the writ petition was not maintainable in view of the effective alternate statutory remedy of appeal available to the petitioners under the CGST Act. The Court observed that all the matters like appreciation of evidence, sufficiency of documents and the conclusion drawn by the adjudicating authority, are all matters that can appropriately be examined by the Appellate Authority. The Court noted that the Appellate Authority is empowered not only to re-appreciate the evidence already placed on record, but also, where necessary, to permit the production of additional evidence.
On the issue of the State GST proceedings under Section 73 and the Central GST proceedings under Section 74, the Court categorically observed that both provisions operate in different arenas and on different considerations. Therefore, merely because the petitioners had been exonerated by the State GST authorities in proceedings under Section 73, it could not automatically follow that the Central GST authorities were barred from initiating or continuing proceedings under Section 74 on the same set of transactions.

Thus, it was held that the writ petition by the petitioner stands dismissed and the petitioner was granted with the liberty to file appeal so that the matter can be decided on its merits.

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GST update /2026-27/0045

GST UPDATE

BRIEF FACTS OF THE CASE:

QUESTION BEFORE HON’BLE COURT:

BRIEF ARGUMENTS BY REVENUE DEPARTMENT:

FINDINGS & JUDGEMENT:

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