M/S Supra Enterprises vs Assistant Commissioner Circle 6 Central Gst Audit 1 & Ors.

Court
Delhi High Court

$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on: 13.08.2026
Judgment pronounced on: 31.08.2026
Judgment uploaded on: 01.09.2026
# CNR No. DLHC010509092024
+ W.P.(C) 11352/2024, CM APPL. 46994/2024 and CM APPL.
53620/2026
M/S SUPRA ENTERPRISES .....Petitioner
Through: Mr. Pulkit Verma, Mr. Saket
Jain, and Ms. Surabhi Kukreti,
Advs.

versus

ASSISTANT COMMISSIONER CIRCLE 6 CENTRAL GST
AUDIT 1 & ORS. .....Respondents
Through: Mr. Arun Khatri, SSC along
with Ms. Anoushka Bhalla,
Adv.

CORAM:
HON'BLE MR. JUSTICE ANIL KSHETARPAL
HON'BLE MS. JUSTICE SHAIL JAIN
J U D G M E N T
ANIL KSHETARPAL, J.:
1. The present Writ Petition under Article 226 of the Constitution
of India has been filed by the Petitioner assailing the proceedings
initiated pursuant to the Show Cause Notice dated 26.07.2024
[hereinafter referred to as „SCN‟] issued under Section 74(1) of the
Central Goods and Services Tax Act, 2017 [hereinafter referred to as
„CGST Act‟]. During the pendency of the present Writ Petition, the
adjudication proceedings have culminated in the passing of Order-in-
Signature Not Verified
Signed By:SAVITA
PASRICHA
Signing Date:01.09.2026
14:32:19
W.P.(C) 11352/2024 Page 1 of 17

Original No.62/AY/AC/NP/2024-25 dated 03.02.2025 [hereinafter
referred to as the „Impugned Order‟] by the Assistant Commissioner,
CGST Div-Nehru Place, Delhi East Commissionerate.
2. At the outset, it deserves notice that the Impugned Order is
appealable under Section 107 of the CGST Act. The appellate remedy
so provided constitutes a complete, efficacious and comprehensive
statutory mechanism for redressal of grievances arising from orders of
adjudication.
3. The Appellate Authority is vested with wide powers to examine
both questions of fact and law, re-appreciate the material placed on
record, scrutinise the findings returned by the adjudicating authority,
and determine the legality as well as the correctness of the order under
challenge. It is for this reason that where the legislature has
consciously created a specialised adjudicatory framework coupled
with a hierarchy of appellate remedies, constitutional courts have
consistently exercised restraint in entertaining a challenge to the
original adjudication order under Article 226 of the Constitution. Such
self-imposed restraint is founded not upon any lack of jurisdiction, but
upon sound principles governing the exercise of judicial discretion.
4. Questions involving appreciation of evidence, adequacy of
material, correctness of factual findings or the legality of conclusions
reached in the adjudicatory process are, in the ordinary course, matters
which the statutory appellate authority is best equipped to examine.
Entertaining a writ petition in such circumstances would not only
permit a litigant to bypass the legislative scheme but would also
Signature Not Verified
Signed By:SAVITA
PASRICHA
Signing Date:01.09.2026
14:32:19
W.P.(C) 11352/2024 Page 2 of 17

render otiose the efficacious appellate remedy consciously provided
by the statute.
5. At the same time, it is equally well settled that the existence of
an alternative statutory remedy does not operate as an absolute bar to
the exercise of writ jurisdiction. In Assistant Commissioner of State
1
Tax and Others v. Commercial Steel Limited , the Supreme Court
reiterated that notwithstanding the availability of an efficacious
statutory remedy, the High Court may entertain a petition under
Article 226 of the Constitution in exceptional circumstances, namely,
where there is: (i) breach of fundamental rights; (ii) violation of the
principles of natural justice; (iii) excess of jurisdiction; or (iv) a
challenge to the vires of a statute or delegated legislation. The
Supreme Court further observed that the mere assertion of one of the
aforesaid grounds would not, by itself, justify bypassing the statutory
remedy. The High Court is required to independently examine
whether the facts of the case disclose circumstances warranting the
exercise of its extraordinary jurisdiction notwithstanding the
availability of an efficacious appellate remedy.
6. In the backdrop of the aforesaid principles, the question which
arises for consideration in the present case is whether the Petitioner
has made out a case falling within any of the recognised exceptions so
as to justify invocation of the extraordinary jurisdiction of this Court
under Article 226 of the Constitution despite the availability of the
statutory remedy under Section 107 of the CGST Act.

1
(2022) 16 SCC 447
Signature Not Verified
Signed By:SAVITA
PASRICHA
Signing Date:01.09.2026
14:32:19
W.P.(C) 11352/2024 Page 3 of 17

FACTUAL MATRIX:
7. In order to appreciate the controversy involved in the present
Writ Petition, the relevant facts, in brief, are required to be noticed.
8. The Petitioner is a partnership firm engaged in the manufacture,
export and distribution of flanged pipes and fittings across India as
well as abroad. It is registered under the CGST Act bearing GSTIN
No.07AACFS1978H1ZZ.
9. On 15.12.2023, Respondent No.1 issued Form GST ADT-01
proposing to conduct an audit under Section 65 of the CGST Act for
the period from July, 2017 to March, 2022. The Petitioner furnished
documents and information in response to the said notice on
20.12.2023, 26.12.2023 and 13.01.2024.
10. Thereafter, an audit memo dated 01.02.2024 was issued raising
various discrepancies relating, inter alia , to availment of input tax
credit (ITC), payment of tax under Reverse Charge Mechanism
(RCM) and other transactions. The Petitioner submitted a
Reply/Clarification dated 15.02.2024 along with supporting
documents.
11. A further audit memo dated 26.03.2024 was issued raising, inter
alia , allegations concerning ITC, RCM, supplies made to certain
suppliers, export transactions and other issues. The Petitioner
submitted Replies dated 30.03.2024 and 26.04.2024 thereto.
12. On 26.06.2024, the Respondents issued Form GST ADT-02
under Section 65(6) of the CGST Act raising audit objections
Signature Not Verified
Signed By:SAVITA
PASRICHA
Signing Date:01.09.2026
14:32:19
W.P.(C) 11352/2024 Page 4 of 17

involving a tax liability of approximately Rs.78,53,548/-, excluding
interest. The Petitioner disputes the said audit findings and contends
that the Replies and supporting documents furnished during the audit
were not duly considered.
13. On 08.07.2024, Form GST DRC-01A was issued intimating the
proposed liability under Section 74(5) of the CGST Act. The
Petitioner submitted its response dated 19.07.2024, disputing both the
audit findings as well as the proposed invocation of Section 74.
14. Thereafter, on 26.07.2024, Respondent No.1 issued SCN in
Form GST DRC-01 under Section 74(1) of the CGST Act proposing
recovery of tax, interest and penalty. The SCN alleges, inter alia , that
the Petitioner had suppressed facts with intent to evade payment of
appropriate taxes.
15. The Petitioner had earlier brought to the notice of the
Respondents that the SCN was the subject matter of challenge before
this Court. The Petitioner had, vide communication dated 21.08.2024,
informed the Department regarding the filing of the Writ Petition.
16. During the pendency of the aforesaid proceedings, the
Petitioner submitted its Reply to the SCN. The Petitioner raised, inter
alia , objections to the invocation of Section 74 of the CGST Act, the
issuance of a consolidated SCN covering multiple financial years, the
audit proceedings preceding the SCN and the individual demands
proposed under the various heads.
Signature Not Verified
Signed By:SAVITA
PASRICHA
Signing Date:01.09.2026
14:32:19
W.P.(C) 11352/2024 Page 5 of 17

17. The adjudicating authority thereafter proceeded to adjudicate
the SCN and passed the Impugned Order dated 03.02.2025,
confirming the demand of tax, together with applicable interest and
penalty, as determined therein.
18. The Petitioner has subsequently placed on record its Rejoinder,
wherein the findings and conclusions contained in the Impugned
Order have also been assailed. The Petitioner contends that the
adjudicating authority failed to consider the detailed submissions and
documents furnished by it, including documents evidencing
payment/reversal of certain amounts through DRC-03, reconciliations,
invoices, bank statements and documents relating to exports.
19. Aggrieved by the aforesaid proceedings and the subsequent
Impugned Order, the Petitioner seeks to invoke the extraordinary
jurisdiction of this Court under Article 226 of the Constitution of
India.
CONTENTIONS OF THE PARTIES:
20. Heard learned counsel representing the parties and with their
able assistance perused the record.
21. Learned counsel representing the Petitioner has made the
following submissions:
i. The proceedings under Section 74 of the CGST Act are
without jurisdiction as the SCN does not disclose the requisite
ingredients of fraud, wilful misstatement or suppression of facts
with intent to evade tax.
Signature Not Verified
Signed By:SAVITA
PASRICHA
Signing Date:01.09.2026
14:32:19
W.P.(C) 11352/2024 Page 6 of 17

ii. A single SCN could not have been issued covering the
financial years 2017-18 to 2021-22, since the statutory scheme
contemplates separate limitation periods and separate
determination for each financial year.
iii. The audit proceedings and the consequential Audit
Report in Form ADT-02 are vitiated since the Replies and
documents furnished by the Petitioner were not considered
before the audit was concluded and the SCN was issued.
iv. The Impugned Order is liable to be set aside for failure to
consider the detailed Reply submitted by the Petitioner and the
documents placed on record, including DRC-03s evidencing
payment/reversal of the amounts in question.
v. The findings returned in respect of the individual heads
of demand, including inadmissible ITC, ITC allegedly availed
from cancelled suppliers, excess ITC, short payment under
RCM, ITC allegedly blocked under Section 17(5), place of
supply and the alleged non-compliance with Rule 96A, are
contrary to the material placed on record.
vi. The proceedings are consequently vitiated by violation of
the principles of natural justice and warrant interference under
Article 226 of the Constitution.
22. Per contra , learned SSC representing the Respondents has
made the following submissions:
Signature Not Verified
Signed By:SAVITA
PASRICHA
Signing Date:01.09.2026
14:32:19
W.P.(C) 11352/2024 Page 7 of 17

i. The challenge raised by the Petitioner essentially pertains
to the correctness of the findings returned in the course of
adjudication and the appreciation of the material placed on
record. Such issues are amenable to examination by the
appellate authority under Section 107 of the CGST Act.
ii. The SCN specifically set out the basis for invocation of
Section 74 of the CGST Act and alleged suppression of facts on
the part of the Petitioner with intent to evade payment of tax.
Whether the material relied upon by the Department was
sufficient to sustain such allegations is a matter going to the
merits of the adjudication and can be examined in appeal.
iii. The Petitioner was afforded adequate opportunity to
place its defence before the adjudicating authority and that the
Reply, submissions and documents furnished by the Petitioner
were duly considered while passing the Impugned Order.
iv. The various objections raised by the Petitioner with
respect to the individual heads of demand, including the alleged
payment of certain amounts through DRC-03, reconciliation of
ITC, RCM liability, eligibility of ITC and compliance with Rule
96A of the CGST Rules, involve appreciation of factual
material and examination of the records. Such matters fall
squarely within the appellate jurisdiction under Section 107 of
the CGST Act.
v. None of the grounds urged by the Petitioner disclose any
patent lack of jurisdiction or manifest violation of the principles
Signature Not Verified
Signed By:SAVITA
PASRICHA
Signing Date:01.09.2026
14:32:19
W.P.(C) 11352/2024 Page 8 of 17

of natural justice so as to attract any of the recognised
exceptions to the rule of alternative remedy.
23. No other submissions have been made by the learned counsel
representing the parties.
ANALYSIS AND FINDINGS:
24. This Court has carefully considered the submissions advanced
on behalf of the learned counsel representing the parties and perused
the material placed on record.
25. As noticed hereinabove, the Petitioner had initially approached
this Court challenging the SCN dated 26.07.2024 issued under Section
74 of the CGST Act. During the pendency of the present Writ Petition,
however, the adjudication proceedings have culminated in the passing
of the Impugned Order dated 03.02.2025. The challenge, as it
presently survives, therefore, encompasses not merely the initiation of
proceedings under Section 74 of the CGST Act but also the findings
and conclusions returned by the adjudicating authority in the
Impugned Order.
26. It is, therefore, necessary to examine whether the aforesaid
grounds disclose any circumstance falling within the recognised
exceptions to the rule of alternative remedy, or whether the grievances
raised by the Petitioner are matters which are required to be agitated
before the statutory appellate authority.
27. The first contention advanced on behalf of the Petitioner is that
the SCN could not have been issued under Section 74 of the CGST
Signature Not Verified
Signed By:SAVITA
PASRICHA
Signing Date:01.09.2026
14:32:19
W.P.(C) 11352/2024 Page 9 of 17

Act as it does not disclose the requisite ingredients of fraud, wilful
misstatement or suppression of facts with intent to evade tax. It is
contended that the allegations essentially arise from discrepancies
noticed during audit and are not supported by any material
establishing the ingredients contemplated under Section 74 of the
CGST Act.
28. The aforesaid objection was specifically raised by the Petitioner
before the adjudicating authority. The Impugned Order notices the
said submission and proceeds to consider the applicability of Section
74 of the CGST Act, including the allegations relating to suppression
of facts. The Petitioner was also afforded an opportunity to submit its
defence and participate in the adjudication proceedings. The
challenge, therefore, is not one of denial of an opportunity of hearing,
but essentially to the sufficiency of the material and the correctness of
the conclusion that the ingredients of Section 74 stood satisfied.
29. Whether the material relied upon by the Respondents
constitutes sufficient evidence of fraud, wilful misstatement or
suppression of facts within the meaning of Section 74 of the CGST
Act, and whether the findings returned by the adjudicating authority in
this regard are legally and factually sustainable, would require an
examination of the SCN, the material relied upon, the Petitioner‟s
replies and the findings recorded in the Impugned Order.
30. These questions fall within the appellate jurisdiction
contemplated under Section 107 of the CGST Act. In the facts of the
present case, where the objection was raised, considered and
Signature Not Verified
Signed By:SAVITA
PASRICHA
Signing Date:01.09.2026
14:32:19
W.P.(C) 11352/2024 Page 10 of 17

adjudicated upon after affording an opportunity of hearing, the mere
disagreement with the conclusion reached by the adjudicating
authority does not disclose a case of patent lack of jurisdiction or
violation of natural justice warranting interference under Article 226
of the Constitution.
31. The next contention advanced on behalf of the Petitioner is that
a single SCN could not have been issued covering the financial years
2017-18 to 2021-22, particularly since separate periods of limitation
operate in respect of each financial year. The contention, however,
cannot be accepted as a ground of jurisdictional challenge in view of
the judgment of this Court in Ambika Traders through Proprietor
Gaurav Gupta v. Additional Commissioner, Adjudication, DGGSTI,
2
CGST Delhi North , wherein a Division Bench, while considering a
consolidated SCN under Section 74 of the CGST Act covering
multiple financial years, held that the statutory scheme does not
prohibit issuance of a consolidated notice. The Court specifically
noted that Sections 73(3) and 74(3) of the CGST Act employ the
expressions “for any period” and “for such periods”, whereas Sections
73(10) and 74(10) refer to the “financial year” for the purpose of
prescribing the limitation for passing the order.
32. The distinction is material. The fact that the limitation
prescribed under Sections 73(10) and 74(10) is computed with
reference to the financial year does not, by itself, impose a
requirement that a separate SCN must necessarily be issued for each
financial year. As held in Ambika Traders (supra) , the statutory

2
2025:DHC:6181-DB
Signature Not Verified
Signed By:SAVITA
PASRICHA
Signing Date:01.09.2026
14:32:19
W.P.(C) 11352/2024 Page 11 of 17

language contemplates a notice relating to a period which may extend
beyond one financial year. The Court further observed that,
particularly in cases involving alleged fraudulent availment or
utilisation of ITC, transactions spread across different financial years
may be required to be examined together to ascertain the alleged
pattern of fraud or suppression. Accordingly, the mere issuance of a
consolidated SCN covering multiple financial years does not
constitute a patent lack of jurisdiction so as to warrant interference
under Article 226 of the Constitution. Any contention that the demand
pertaining to a particular financial year is barred by the limitation
prescribed under Section 74(10) is a distinct issue, which may be
examined in the statutory appeal on the basis of the relevant dates and
the period to which the demand relates.
33. The Petitioner has also assailed the audit proceedings on the
ground that its Replies dated 15.02.2024, 30.03.2024 and 26.04.2024,
along with the documents furnished therewith, were not considered
before issuance of Form GST ADT-02. It is contended that the audit
report was approved before the final Reply was furnished and that the
subsequent issuance of the report was consequently contrary to
Section 65(6) of the CGST Act.
34. These contentions require examination of the audit record and
the material considered by the Respondents. Significantly, the
Petitioner was thereafter afforded an opportunity to file its defence in
the adjudication proceedings, which culminated in the Impugned
Order. Whether the audit authorities properly considered the
Petitioner‟s replies and whether any prejudice was occasioned thereby
Signature Not Verified
Signed By:SAVITA
PASRICHA
Signing Date:01.09.2026
14:32:19
W.P.(C) 11352/2024 Page 12 of 17

are matters which can appropriately be urged before the appellate
authority and do not, in the facts of the present case, disclose a patent
violation of natural justice warranting interference under Article 226
of the Constitution.
35. Learned counsel representing the Petitioner has placed reliance
upon the judgment of the Andhra Pradesh High Court in Vardhaman
3
Gold v. State of Andhra Pradesh & Ors. , wherein the audit report
and the consequential notice under Section 73 of the Andhra Pradesh
Goods and Service Tax Act, 2017, were set aside on the ground that
the mandatory period contemplated under Section 65(3) of the Act had
not elapsed before the audit was finalised and, further, that the
subsequent notice was founded upon such defective audit report. The
said decision is distinguishable on its facts. In the present case, the
Petitioner was subsequently afforded a full opportunity to respond to
the SCN and participate in the adjudication proceedings, which
culminated in the Impugned Order. The grievance raised by the
Petitioner is thus not of denial of an opportunity to meet the case
ultimately adjudicated upon, but of the manner in which its replies and
material were considered. The aforesaid decision, therefore, does not
establish any patent violation of natural justice or lack of jurisdiction
in the present case so as to warrant interference under Article 226 of
the Constitution.
36. The Petitioner has further contended that the Impugned Order
fails to consider its detailed Reply and the documents relied upon

3
2023 SCC OnLine AP 3833
Signature Not Verified
Signed By:SAVITA
PASRICHA
Signing Date:01.09.2026
14:32:19
W.P.(C) 11352/2024 Page 13 of 17

therein, including DRC-03s, reconciliations, invoices, bank statements
and documents relating to exports.
37. The Impugned Order, however, records the submissions of the
Petitioner and deals with the objections raised during the adjudication
proceedings. Whether the findings returned therein correctly
appreciate the documents and explanations furnished by the Petitioner,
or whether the material relied upon by the Petitioner warranted a
different conclusion, is a matter concerning the merits of the
adjudication. Such issues are appropriately amenable to examination
in appeal and do not, in the circumstances of the present case, warrant
interference in writ jurisdiction.
38. Learned counsel representing the Petitioner has also assailed the
findings returned in respect of the individual heads of demand,
contending that certain amounts had already been paid or reversed
through DRC-03, certain ITC had either not been availed or was
otherwise admissible, the alleged RCM liability stood discharged, and
the export transactions were duly supported by invoices, returns and
proof of realisation.
39. These submissions essentially challenge the factual findings and
computation of liability under the respective heads. Their examination
would require consideration of the returns, invoices, ledgers, DRC-
03s, reconciliations, bank statements and other documents relied upon
by the parties. The correctness of the findings and the effect to be
given to such material are matters falling within the appellate
jurisdiction.
Signature Not Verified
Signed By:SAVITA
PASRICHA
Signing Date:01.09.2026
14:32:19
W.P.(C) 11352/2024 Page 14 of 17

40. The same applies to the contention regarding the difference
between GSTR-2A and GSTR-3B, the applicability of Section 17(5)
of the CGST Act and the alleged compliance with Rule 96A of the
CGST Rules. The applicability of the decisions relied upon by the
Petitioner would also depend upon the facts and material on record.
These issues, therefore, do not disclose any exceptional circumstance
warranting interference under Article 226 of the Constitution.
41. Learned counsel representing the Petitioner has sought to
characterise the aforesaid deficiencies as violation of the principles of
natural justice. However, the record indicates that the Petitioner
participated in the adjudication proceedings, filed a detailed Reply to
the SCN and placed documents in support of its defence.
42. A distinction must be maintained between a case where a party
is denied an opportunity of hearing and one where, despite having
been heard, the party disputes the manner in which its defence or
documents have been considered. The latter constitutes a challenge to
the merits of the adjudication and is ordinarily amenable to the
statutory appellate remedy.
43. In the present case, the Petitioner has not demonstrated any
patent denial of an opportunity to present its case. Its grievance
essentially concerns the appreciation of its Reply and supporting
documents and the findings returned by the adjudicating authority
thereon.
44. The aforesaid grounds, therefore, do not disclose any manifest
violation of the principles of natural justice so as to warrant exercise
Signature Not Verified
Signed By:SAVITA
PASRICHA
Signing Date:01.09.2026
14:32:19
W.P.(C) 11352/2024 Page 15 of 17

of the extraordinary jurisdiction of this Court under Article 226 of the
Constitution.
CONCLUSION:
45. In view of the foregoing discussion, this Court is of the
considered view that the present case does not disclose any
circumstance warranting exercise of the extraordinary jurisdiction of
this Court under Article 226 of the Constitution notwithstanding the
availability of the statutory remedy of appeal under Section 107 of the
CGST Act.
46. The issues raised by the Petitioner, including the challenge to
the invocation of Section 74, the consolidated SCN, the audit
proceedings, the consideration of the Petitioner‟s defence and the
individual heads of demand, are matters which can appropriately be
examined by the appellate authority in accordance with law.
47. Accordingly, the present Writ Petition, along with the pending
applications, is dismissed.
48. The Petitioner shall, however, be at liberty to avail the statutory
remedy of appeal under Section 107 of the CGST Act, if so advised.
49. It is clarified that, in the event the Petitioner prefers an appeal
under Section 107 of the CGST Act, it shall be at liberty to seek
exclusion of the period during which the present Writ Petition
remained pending before this Court, in accordance with law. The
appellate authority shall consider the question of limitation, including
any prayer for exclusion of the period spent in prosecuting the
Signature Not Verified
Signed By:SAVITA
PASRICHA
Signing Date:01.09.2026
14:32:19
W.P.(C) 11352/2024 Page 16 of 17

proceedings before this Court, in accordance with law and
uninfluenced by any observations contained in the present Judgment.

ANIL KSHETARPAL, J.

SHAIL JAIN, J.
AUGUST 31, 2026
sp/shah

Signature Not Verified
Signed By:SAVITA
PASRICHA
Signing Date:01.09.2026
14:32:19
W.P.(C) 11352/2024 Page 17 of 17