Availability of a statutory GST appeal precludes writ interference where challenges require factual examination.

RPP Infra Projects Ltd. held separate GST registrations in Karnataka, Tamil Nadu and Telangana. The Directorate General of GST Intelligence (“DGGI”), Kanpur Regional Unit, investigated an alleged chain of invoices issued without corresponding supplies, through which input tax credit (“ITC”) was allegedly routed via Club Axe Clothing, Footprints, Disha Traders and Univista Contractors Ltd. to various recipients, including the Petitioner.

The Petitioner contended that Sunil Hitech Engineers Ltd. had awarded it construction work, which was subcontracted to Univista Contractors Ltd. on a back-to-back basis. It relied on work orders, invoices, ledgers, bank records and other documents to establish the genuineness of the transactions and the ITC claimed.

A common show-cause notice was issued to 95 noticees. The Additional Commissioner, Adjudication, DGGI, Central GST, Delhi North, subsequently passed a common order dated 4 February 2025 confirming ITC-related demands of ₹2,62,74,687 against the Karnataka registration, ₹10,57,452 against the Tamil Nadu registration, and ₹2,94,30,991 against the Telangana registration, along with interest and penalties.

The Petitioner filed a common reply dated 17 April 2024 with supporting documents and an additional reply dated 13 January 2025 challenging the allocation of adjudication to Delhi North. Its counsel appeared at the personal hearing on 14 January 2025.

Whether the High Court should exercise writ jurisdiction despite the statutory appellate remedy under Section 107 of the Central Goods and Services Tax Act, 2017 (“CGST Act”), on the ground that the Petitioner’s reply and documents were not considered and that the adjudication order was inadequately reasoned?

Whether the DGGI had jurisdiction to investigate and issue proceedings against taxpayers administratively assigned to State tax authorities?

Whether the Additional Commissioner, CGST Delhi North, had jurisdiction to adjudicate the common show-cause notice involving noticees and registrations situated in different States?

Whether Circular No. 171/03/2022-GST precluded recovery under Section 74 of the CGST Act where the alleged inward and outward transactions were unsupported by actual supplies?

Whether the Petitioner was required to pursue the statutory appeal under Section 107 in respect of the factual and merits-based challenges to the demand, interest and penalties?

The Court applied the statutory appellate remedy under Section 107 of the CGST Act, holding that ordinarily disputed factual and legal issues arising from an adjudication order must be examined by the appellate authority.

Under Section 107(11), the Appellate Authority may make further inquiry and confirm, modify or annul the decision, although it cannot remand the matter to the adjudicating authority.

Sections 74, 75(6), 122 and 155 of the CGST Act govern, respectively, demand proceedings involving fraud or suppression, the requirement of a reasoned adjudication order, penalties, and the burden of proving eligibility for ITC.

Notification No. 14/2017-Central Tax empowered specified DGGI officers to act as Central tax officers throughout India, while Notification No. 02/2022-Central Tax authorised specified Additional and Joint Commissioners, including those in Delhi North, to adjudicate DGGI notices throughout India.

Circular No. 169/01/2022-GST provided that a common show-cause notice involving noticees in multiple Commissionerates would be adjudicated with reference to the principal place of business of the noticee bearing the highest tax demand.

Circular No. 171/03/2022-GST distinguishes between unsupported inward supplies used to make genuine outward supplies, where recovery under Section 74 may arise, and cases where both inward and outward supplies are unsupported, where recovery under Sections 73 or 74 is stated to be unnecessary but penal action under Section 122 may follow.

The Court also relied on Armour Security (India) Ltd. v. Commissioner, CGST, Delhi East Commissionerate, 2025 SCC OnLine SC 1700, for the principle that administrative allocation of taxpayers to a State tax authority does not exclude intelligence-based enforcement by DGGI.

The Court held that the existence of an appellate remedy did not automatically bar writ jurisdiction, but the Petitioner had not demonstrated circumstances warranting interference.

Although the Department acknowledged that the Petitioner’s reply was inadvertently not incorporated in the adjudication order, non-reproduction of a reply did not by itself establish non-consideration.

The order recorded the personal hearing and disclosed the essential basis for rejection of the ITC claim—namely, that the invoices were unsupported by actual supplies, the conditions for ITC were not satisfied, and the burden under Section 155 had not been discharged.

Assessing the work orders, subcontracts, invoices, payments and evidence of execution would require a detailed factual examination, which was appropriately left to the statutory appellate authority.

The jurisdictional challenge also failed. The DGGI officers were empowered to exercise Central tax powers throughout India, and the Petitioner’s State-wise administrative registration did not exclude DGGI’s intelligence-based jurisdiction.

The common show-cause notice was properly assigned to Delhi North because Disha Traders, whose registered address fell within the Delhi East Commissionerate, was the noticee against whom the highest demand—₹20,65,43,038—was proposed.

As to Circular No. 171/03/2022-GST, the Court found that its applicability depended on whether the inward and outward transactions were genuine or fictitious.

Since the Petitioner primarily asserted that both transactions were genuine and relied on the Circular only in the alternative, determining the applicable category required factual examination. The Circular therefore did not render the proceedings without jurisdiction.

The Court rejected the challenges concerning DGGI’s jurisdiction and the allocation of adjudication to Delhi North, while leaving open all other issues concerning the demand, ITC eligibility, interest, penalties and applicability of Circular No. 171/03/2022-GST for determination in appeal.

Because the writ petitions had been entertained and interim protection had been granted, the Petitioner was permitted to file statutory appeals with the requisite pre-deposit within four weeks from 16 September 2026.

Such appeals were directed to be entertained and decided on merits without being rejected on limitation.

The interim protection was continued for four weeks and would thereafter be governed by the statutory protection under Section 107(7), provided the appeals were filed within that period; otherwise, the protection would cease.