Delhi High Court Holds Writ Jurisdiction Not Invocable Where Statutory Appellate Remedy Exists Under CGST Act

Background:
The petitioner, M/s Power Line Air Express, a GST-registered proprietorship engaged in courier agency services, was issued summons under Section 70 of the Central Goods and Services Tax Act, 2017 (CGST Act) requiring production of various documents. Following the petitioner’s submissions and responses, the Principal Commissioner, Delhi South Commissionerate, issued a demand-cum-show cause notice (SCN) alleging non-disclosure of tax liability and suppression of material facts, seeking recovery of GST dues for the period April 2018 to March 2024.

Proceedings and Petitioner’s Submissions:
The petitioner challenged the subsequent Order-in-Original (OIO) confirming the demand, contending that the proceedings were vitiated by violation of natural justice. The petitioner argued that crucial relied upon documents (RUDs) forming the basis of the SCN and demand were not supplied despite specific requests, denying an effective opportunity to respond. It was further submitted that the adjudicating authority failed to consider the petitioner’s detailed reply and supporting documents, rendering the adjudication a mere formality. On merits, the petitioner disputed the valuation methodology adopted by the department, arguing that Section 15(1) of the CGST Act mandates transaction value as the basis for GST, and that alternative valuation methods or benchmarking against unrelated entities like DHL were unwarranted. The invocation of Section 74, which pertains to fraud or suppression, was also challenged as unjustified in the absence of evidence of concealment.

Court’s Reasoning:
The Delhi High Court, after hearing the parties, declined to enter into the merits of the controversy, noting that Section 107 of the CGST Act provides a specific appellate remedy against orders passed under Section 74. The Court reiterated the well-settled principle that writ jurisdiction under Article 226 of the Constitution is ordinarily not to be exercised where an efficacious alternative statutory remedy exists, except in limited circumstances such as violation of fundamental rights, lack of jurisdiction, or breach of natural justice that cannot be remedied by the appellate authority.

The Court observed that the petitioner’s grievances—including alleged non-supply of documents, delayed or non-service of summons, and non-consideration of replies—are all matters arising from the adjudicatory record and are within the scope of the statutory appellate process. The Court emphasized that dissatisfaction with the manner in which the adjudicating authority dealt with the record does not, by itself, justify bypassing the appellate remedy.

Decision:
Accordingly, the High Court dismissed the writ petition, granting liberty to the petitioner to avail of the appellate remedies provided under the CGST Act. The Court clarified that it had not expressed any opinion on the merits of the case, leaving all rights and contentions open for adjudication by the competent appellate authority.

This decision reinforces the principle that the writ jurisdiction of High Courts is not a substitute for statutory appellate mechanisms, particularly in tax matters governed by comprehensive legislative frameworks.