Appellate Authority under Section 107 GST Act Cannot Remand After Holding Show Cause Notice and Cancellation Order Cryptic - High Court Quashes Remand and Consequential Order but Allows Fresh Proceedings as per Law.

Issue: Whether the appellate authority under Section 107 of the GST Act, after finding the show cause notice and cancellation order cryptic and unsustainable, could remand the matter to the Assistant/Deputy Commissioner for verification of facts and fresh action, thereby giving the Revenue a second opportunity.

Facts: The petitioner’s GST registration was cancelled on 26.09.2024 after a show cause notice dated 14.09.2024, which was later upheld by rejection of revocation on 31.12.2024. On appeal, the appellate authority on 28.03.2025 held the show cause notice and cancellation order to be cryptic and unsustainable but directed verification of facts by the jurisdictional officer. Based on this, respondent no. 1, vide order dated 01.05.2025, refused to revoke the cancellation. The petitioner challenged both orders, contending that once the appellate authority held the cancellation order bad in law, it could not remand the matter, as Section 107 does not empower remand.

Held: The Court held that once the appellate authority found the show cause notice and cancellation order cryptic and without reasons, it ought to have set them aside outright. Section 107 empowers the appellate authority to confirm, modify, or annul an order, but not to remand or give the Revenue a second opportunity. Therefore, the portion of the appellate order dated 28.03.2025 remanding the matter was quashed, along with the consequential order dated 01.05.2025. However, liberty was reserved to the respondents to initiate fresh proceedings in accordance with law. The writ petition was accordingly allowed.

The SC holds summons under s.70 are part of investigation (not adjudication) and do not attract the bar in s.6(2)(b); parallel CGST inquiry valid despite earlier SGST SCN.

Issue: Whether the issuance of summons under Section 70 of the CGST Act amounts to "initiation of proceedings" barred under Section 6(2)(b) of the CGST Act, 2017, when the State GST authorities have already issued a show cause notice (SCN) on the same subject matter?

Facts: The assessee contended that once the State GST Department had issued an SCN on ITC availed from cancelled suppliers, the Central GST authorities were barred under Section 6(2)(b) from initiating parallel proceedings. Summons were issued by CGST officers under Section 70 to inquire into the same issue. The assessee argued that such summons amounted to parallel proceedings, violating the principle of "single interface" and cooperative federalism.

Held:  The Supreme Court held that summons under Section 70 are only steps in the process of inquiry and evidence collection, not "initiation of proceedings." The phrase “initiation of proceedings” in Section 6(2)(b) refers to issuance of SCN leading to adjudication, not investigation. Therefore, parallel inquiries by CGST authorities through summons are valid despite a prior SCN issued by SGST authorities. The SLP was dismissed, affirming that Section 6(2)(b) is attracted only when an SCN on the same subject matter is issued, not at the stage of summons.

Fresh provisional attachment under Section 83(1) of CGST Act impermissible after expiry of one year of earlier order — No statutory power of renewal or re-issuance; subsequent attachments quashed.

Issue: Whether a fresh provisional attachment order under Section 83(1) of the CGST Act, 2017 can be issued after expiry of one year of the earlier provisional attachment, despite Section 83(2) mandating that such order shall cease to have effect after one year from its issuance.

Facts: The appellant’s bank accounts were provisionally attached by orders dated 17.10.2023 and 26.10.2023 under Section 83 of the CGST Act. These orders lapsed by operation of Section 83(2) on 18.10.2024 and 27.10.2024, respectively. Despite this, fresh orders dated 13.11.2024 and 18.12.2024 were issued by the respondent, terming them as “renewal” of the earlier attachments. The Gujarat High Court upheld the validity of such renewal, holding that there was no statutory bar against re-issuance of provisional attachment to safeguard revenue. The appellant challenged this before the Supreme Court.

Held: The Supreme Court held that Section 83(2) clearly provides that a provisional attachment ceases to have effect after one year, with no provision for renewal or extension, unlike similar provisions under the Excise Act or the Customs Act. Issuance of fresh attachment orders after expiry amounts to overreach of statutory powers and renders Section 83(2) otiose. The Court approved the Kerala High Court’s contrary view in Ali K. and rejected the Gujarat High Court’s reasoning. Consequently, the impugned attachment orders dated 13.11.2024 and 18.12.2024 were quashed, and the appellant’s bank accounts ordered to be de-freezed.

“Impugned GST Order Quashed: Court Holds Notice on Portal Alone Invalid After Registration Cancellation”

Issue: Whether the order dated 07.12.2023 passed under Section 73 of the U.P. GST Act, 2017 is valid when the petitioner’s registration was already cancelled and no proper service of notice was made.

Fact: The petitioner’s GST registration was cancelled on 03.06.2021. After cancellation, no business was carried out. A show cause notice was uploaded only on the GST portal and thereafter the impugned order was passed. The petitioner contended that once registration was cancelled, it was not obligated to check the portal, and proper service of notice by alternative means was required. Reliance was placed on M/s Katyal Industries v. State of U.P. decided by a coordinate Bench.

Held: The Court held that non-service of notice in an appropriate manner amounted to violation of natural justice. Accordingly, the impugned order dated 07.12.2023 was quashed. Liberty was granted to the department to issue a proper notice and proceed in accordance with law. The writ petition was disposed of.

Refund of unutilized ITC on exports – Rejection unsustainable where LUT filed prior to actual exports; refund directed with statutory interest and warning against unwarranted objections by Department.

Issue: Whether the refund claim of unutilized ITC on exports could be rejected on the ground that the Letter of Undertaking (LUT) was filed on 26th August 2021, whereas the refund period claimed was July–December 2021. The department rejected the claim alleging the LUT was not valid for the initial period.

Facts: The Petitioner exported goods between September and December 2021, which are zero-rated supplies under GST. A refund of Rs. 10,05,341 was claimed for accumulated ITC. All documents sought in the SCN were submitted and duly acknowledged in the impugned order. Despite this, the refund was rejected solely because the LUT was dated 26th August 2021, whereas refund was sought for July–December 2021. However, the exports actually commenced only from 13th September 2021, i.e., after the LUT filing.

Held: The Court held that rejection of refund on such a technical and untenable ground was contrary to the scheme and spirit of GST law, which incentivizes exports through zero-rated supplies. Since the LUT was valid before the first export, rejection was unsustainable. The impugned order was set aside, and the department was directed to process and credit the refund with statutory interest within two weeks, failing which interest @12% would be payable after 03.09.2025. Directions were also issued to the Commissioner to ensure exporters are not harassed with such unwarranted objections.

GST Registration Cancellation for Non-Filing of Returns — Restoration Permissible on Subsequent Filing and Payment Despite Expiry of Revocation Period

Issue: Whether cancellation of GST registration under Section 29(2)(c) of the CGST/AGST Act, 2017, for non-filing of returns for six months, can be set aside when the assessee subsequently files all pending returns and pays tax dues with interest and late fee, despite the expiry of the time limit for revocation.

Facts: The petitioner, sole proprietor of M/s Priyanshi Enterprises, failed to file GST returns for six months and was served a show cause notice. As no reply was filed, registration was cancelled vide order dated 19.04.2024. The petitioner later filed all pending returns up to June 2024 and discharged full GST liability with late fee and interest. However, application for revocation could not be filed as the limitation of 270 days had expired. Hence, writ petition was filed seeking restoration of registration.

Held: The Court observed that cancellation of registration entails serious civil consequences and under the proviso to Rule 22(4) of the CGST Rules, 2017, if all returns and dues are cleared, the authority may drop proceedings and restore registration. Following earlier decision in Sanjoy Nath v. UOI (GAU-HC), the Court directed that the petitioner may approach the concerned officer within two months, who shall consider restoration of GST registration on compliance of all statutory requirements. The writ petition was thus disposed of with liberty to the petitioner.

High Court Quashes GST Registration Cancellation Passed Without Proper Opportunity; Directs Restoration on Compliance with Rule 22(4) of CGST Rules

Issue: Whether cancellation of GST registration under Section 29(2)(c) of the CGST/AGST Act, 2017 for non-filing of returns without affording proper opportunity and without assigning reasons is sustainable, and whether restoration can be allowed upon compliance with Rule 22(4) of the CGST Rules, 2017.

Facts: The petitioner, sole proprietor of M/s Disang Enterprise, was issued a show cause notice dated 08.01.2020 for non-filing of GST returns for six consecutive months. Without mentioning any hearing date, the Superintendent passed an order cancelling registration on 08.01.2020. The petitioner, being unaware of online procedures, could not reply or comply in time. His appeal was also dismissed on 09.07.2025. Aggrieved, he filed the writ petition seeking restoration of registration, expressing readiness to file pending returns and pay dues as per Rule 22(4).

Held: The High Court observed that cancellation of GST registration entails serious civil consequences. As per the proviso to Rule 22(4), if the assessee furnishes pending returns and makes full payment of tax, interest, and late fees, the officer may drop proceedings. Relying on earlier precedent (Sanjoy Nath v. UOI), the Court directed that if the petitioner approaches the authority within two months with full compliance, the officer shall consider restoration of GST registration in accordance with law. The writ petition was accordingly disposed of, with arrears to be paid and timelines under Section 73(10) to run from the date of this order.

"Writ Petition Dismissed for Non-Exhaustion of Statutory Appeal under Tamil Nadu GST Act"

Issue: Whether the petitioner, whose rectification application under Section 161 of the Tamil Nadu GST Act, 2017 was rejected, could directly invoke writ jurisdiction without exhausting the statutory remedy of appeal.

Facts: The petitioner’s rectification application was rejected on 21.01.2025. Instead of filing an appeal as provided under the Act, the petitioner approached the High Court through a writ petition. The High Court dismissed the petition due to the availability of an alternative statutory remedy. This dismissal was upheld by the Division Bench in writ appeal.

Held: Since the petitioner had an admitted remedy of appeal against the rejection of the rectification application, the court declined to interfere with the High Court’s decision and dismissed the petition. Any pending applications were also disposed of.

Double Taxation Disallowed — Earlier Rs.21.38L Recovery Cannot Be Re-included in Subsequent GST Demand; Matter Remitted for Re-adjudication (Oct 2021–Mar 2022

Issue: Whether the Additional State Tax Officer, while raising a demand under Section 73 of the GST Act for the tax periods April 2021 to March 2022, could lawfully include the demand for April 2021 to September 2021 that had already been raised earlier in an order dated 1 December 2022 and recovered during the pendency of appeal, thereby resulting in duplication.

Facts: The petitioner, aggrieved by an order dated 11 April 2025 under Section 73 of the CGST/OGST Act for Rs.51,39,498/-, challenged the inclusion of an earlier demand of Rs.21,38,338/- for April 2021 to September 2021, which had already been raised by order dated 1 December 2022 and recovered from the petitioner’s cash ledger during appeal proceedings. The respondent’s counsel, on instructions, conceded that the earlier demand was indeed included again in the later order.

Held: The High Court held that including the earlier recovered demand in the subsequent assessment order amounted to double taxation and was unsustainable in law. Consequently, the order dated 11 April 2025 was set aside. The matter was remitted to the Additional State Tax Officer to re-adjudicate only for the period October 2021 to March 2022, after giving the petitioner due opportunity to produce records, hear submissions, and conclude proceedings within six weeks.

Challenge to GST demand orders on alleged fraudulent ITC—Petitioner’s plea of non-consideration of reply, personal hearing, and limitation rejected—Court held writ not maintainable in such fact-intensive matters; Petitioner relegated to appellate remedy under Section 107 CGST Act with liberty to file appeal by 30th September 2025.

Issue: Whether the impugned GST demand orders dated 3rd and 9th February 2025, raising demands of Rs. 69,42,504 and Rs. 1,21,49,568 respectively, could be sustained when the Petitioner alleged that its reply to the show cause notices and participation in personal hearing were not considered, and also raised the plea of limitation.

Facts: The Petitioner was one among 176 noticees alleged to have fraudulently availed/passed on ITC on the basis of goods-less invoices issued by non-existent firms during FY 2017-18. Against the Petitioner, fraudulent ITC of Rs. 21,06,027 and Rs. 80,99,712 was alleged under two separate SCNs dated 5th August 2024. The Petitioner contended that its reply dated 30th August 2024 was ignored, though a faint departmental stamp evidenced receipt, and that personal hearing was not recorded. The Department argued that orders were passed within limitation and any delay in portal-uploading was a technical glitch. The Court noted that the matter related to a larger fraudulent ITC racket involving Rs. 8.83 crores with multiple parties, requiring factual adjudication.

Held: The Court held that issues of fraudulent ITC involve complex fact-finding unsuitable for writ jurisdiction. Following SC precedent in Commercial Steel Ltd. and earlier High Court rulings, it relegated the Petitioner to avail the appellate remedy under Section 107 of the CGST Act. The plea of non-consideration of reply can be urged before the appellate authority. The Court also rejected the contention that one consolidated order was mandatory, as the two SCNs pertained to different fraudulent networks. The writ petition was thus dismissed, with liberty to file appeal by 30th September 2025, along with mandatory pre-deposit, and such appeal would not be barred by limitation.

“Retrospective Cancellation of GST Registration Unsustainable in Absence of Notice and Reasons – Cancellation Effective Only from Date of SCN”

Issue: Whether the retrospective cancellation of GST registration w.e.f. 30.08.2019, without specific mention in the SCN and without recording reasons, is sustainable under Section 29 of the CGST Act, 2017.

Facts: The Petitioner’s GST registration was cancelled vide order dated 16.03.2023 with retrospective effect from 30.08.2019. The SCN dated 04.04.2022 only alleged that the principal place of business was not found at the time of field visit but did not propose retrospective cancellation. The Petitioner contended that such retrospective cancellation is impermissible and relied upon earlier Delhi High Court judgments in Subhana Fashion, Balaji Industries, Riddhi Siddhi Enterprises and Delhi Polymers, which consistently held that retrospective cancellation cannot be made mechanically and without assigning reasons.

Held: The Court held that retrospective cancellation of GST registration without notice and without reasons is unsustainable. Since the SCN did not propose retrospective effect and no reasons were assigned, the cancellation order is modified to be effective only from the date of the SCN i.e. 04.04.2022. The petition was accordingly disposed of.

Fraudulent ITC Availment of Rs. 50.33 Crores – Delhi HC upholds GST Order-in-Original dated 01.02.2025 and DRC-07 dated 09.02.2025 against Ganpati Polymers; plea of non-participation due to suspended registration and delayed uploading rejected as callous conduct; writ dismissed with Rs. 50,000 costs, liberty granted to pursue appellate remedy under Section 107 CGST Act by 31.08.2025.

Issue: Whether the impugned Order-in-Original dated 1st February 2025 and DRC-07 dated 9th February 2025 against the Petitioner (Ganpati Polymers) could be sustained, when the Petitioner claimed non-participation in the proceedings due to suspension of GST registration and belated uploading of the order, while the Department alleged fraudulent availment of ITC of over Rs. 50.33 crores.

Facts: The Department’s case was that certain individuals, namely Rajesh Jindal and Adesh Jain, created and controlled multiple fake firms engaged in issuance of invoices without supply of goods, through which inadmissible ITC was passed on. Investigations, searches, and statements revealed dummy entities, fake transactions, and use of non-transport vehicles for claimed movement of goods. The Petitioner was one of the noticees but failed to appear in the personal hearings or file replies, despite being aware of the proceedings. His plea was that GST registration was suspended and he was not regularly checking the GST portal, leading to non-participation.

Held: The Court held that the Petitioner’s conduct of not filing replies or attending hearings despite being aware of the investigation was callous and could not be condoned. The order was passed within limitation and the plea of delay was rejected. Accordingly, the writ petition was dismissed with costs of Rs. 50,000 to be deposited with the Delhi High Court Bar Association. However, liberty was granted to the Petitioner to avail appellate remedy under Section 107 CGST Act by 31st August 2025, with the assurance that if filed with requisite pre-deposit, the appeal would not be barred by limitation and would be heard on merits.

The Supreme Court condoned a 105-day delay but dismissed the Revenue’s petitions, declining to interfere under Article 136 of the Constitution. This effectively upholds the High Court’s ruling, which had held that telecommunication towers are movable and not immovable property for the purposes of Section 17(5) of the CGST Act, thereby allowing input tax credit on goods and services used in their construction.

GST Evasion Bail Case – Compoundable Offence & Custody Considerations

Issue: Whether the applicant, arrested for alleged GST evasion by claiming false input tax credit under Section 132 of the CGST Act, should be granted bail considering the offence is compoundable and punishable with imprisonment up to five years.

Fact: The applicant was arrested on 18.06.2025 in Case Crime No. DGGI/INV/GST/1349/Gr-H/2025 for alleged GST evasion. He expressed willingness to cooperate with investigation/trial and to pay the compounding fee. The Directorate General of GST Intelligence opposed bail, citing the serious economic impact of the offence, but admitted it was compoundable. The applicant has no prior criminal history and has been in custody since arrest.

Held: Considering the compoundable nature of the offence, the maximum sentence prescribed, the applicant’s willingness to compound after paying liability and penalty, absence of prior criminal record, and his custody since 18.06.2025, the court allowed the bail application without commenting on merits. The applicant to be released on personal bond and sureties subject to conditions of non-tampering with evidence, non-pressurizing witnesses, and regular court appearance.

Restoration of GST Registration Permissible if Pending Returns and Dues Are Cleared Despite Lapse of Revocation Period

Issue: Whether the GST registration of a partnership firm, cancelled for non-filing of returns for six continuous months under Section 29(2)(c) of the CGST Act, 2017, can be restored when the petitioner is willing to furnish all pending returns and pay the dues, despite the lapse of time for filing a revocation application.

Facts: The petitioner, a registered partnership firm under CGST/AGST, failed to file GST returns for six consecutive months. Consequently, a show cause notice was issued, which the petitioner could not respond to due to unfamiliarity with the online portal. The Superintendent subsequently cancelled the GST registration. After recovering from COVID-19, the petitioner updated all pending returns and discharged all GST dues with interest and late fees. Attempts to seek revocation of cancellation failed as the statutory time limit for revocation had expired, and an appeal against the rejection was also dismissed. The petitioner then filed a writ petition before the Court seeking restoration of GST registration.

Held: The Court observed that under the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017, if a person is ready to furnish all pending returns and pay dues with interest and late fees, the proper officer has the authority to drop cancellation proceedings. The Court directed that the petitioner may approach the concerned authority within two months for restoration of GST registration, and upon compliance, the officer shall consider and restore the registration expeditiously. The writ petition was disposed of with no cost.

GST demand for pre-resolution period not in approved plan held unenforceable; assessment quashed and refund directed.

Issue: Whether the GST Department can raise and recover tax demands for the period prior to the approval of a Resolution Plan by the NCLT, when such dues were not part of the plan approved under the Insolvency and Bankruptcy Code (IBC).

Fact: The petitioner company entered CIRP on 15.03.2022, and a Resolution Professional invited claims from all creditors, including the GST Department. The Resolution Plan was approved by the NCLT on 12.03.2025. Despite this, the Deputy Commissioner issued an assessment order dated 29.12.2023 under Section 73 of the CGST/UPGST Act for FY 2017-18, demanding ?52,04,015. The petitioner contended, relying on Supreme Court and High Court precedents, that post-approval, no fresh claims can be raised for periods prior to the plan’s approval.

Held: Once the Resolution Plan is approved under Section 31 of the IBC, all prior dues not included in the plan stand extinguished. Authorities cannot create fresh liabilities thereafter, as it violates the moratorium principle and disrupts the resolution process. Citing Ghanshyam Mishra, Vaibhav Goyal, and Essar Steel, the court quashed the assessment order dated 29.12.2023 and directed refund of any amount recovered pursuant to it. The writ petition was allowed.

Retrospective GST Amendment Allows Petitioner’s ITC Claim Despite Delay in Filing Return

Issue: Whether the petitioner is entitled to avail Input Tax Credit (ITC) of Rs 79,05,895 for FY 2018-19 when the GSTR-3B return was filed on 23.10.2019, beyond the due date of 20.10.2019 prescribed under Section 16(4) of the CGST Act, 2017, in light of the retrospective amendments made by the Finance (No. 2) Act, 2024.

Fact: The petitioner’s ITC claim for FY 2018-19 was rejected via order dated 26.04.2024 on the ground of delayed filing of GSTR-3B beyond the due date under Section 16(4) of the CGST Act. Subsequently, the Finance (No. 2) Act, 2024 inserted sub-sections (5) and (6) in Section 16, allowing ITC for FYs 2017-18 to 2020-21 if claimed in returns filed up to 30.11.2021, with retrospective effect from 01.07.2017, as notified under Notification No. 17/2024-Central Tax dated 27.09.2024.

Held: The Court held that in view of the retrospective amendments to Section 16 by the Finance (No. 2) Act, 2024, the petitioner is entitled to claim ITC for the relevant period subject to the prescribed conditions. The impugned order dated 26.04.2024 and Demand-cum-Show Cause Notice dated 27.12.2023 were set aside, and the matter was remanded to the Assistant Commissioner, CGST, for fresh proceedings after giving the petitioner an opportunity of hearing.

Bail Granted in Rs. 10 Crore ITC Fraud Case Under Section 483 BNSS, 2023 Considering 8-Month Custody

Issue: Whether the applicant is entitled to be released on regular bail under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 in connection with alleged fraudulent availment of Input Tax Credit (ITC) of more than Rs. 10 crores through fictitious firms and transactions.

Facts: The applicant was arrested on 17.12.2024 in a case registered by the DGGI, Ahmedabad, for allegedly creating forged firms using fake documents and showing fictitious purchases to claim ITC. The applicant contended that goods were actually purchased from various firms whose GST registrations were later cancelled for their own lapses, not due to his fault. Investigation was complete and charge-sheet filed. He has been in custody for around 8 months. The GST department opposed bail, alleging that the applicant had himself created bogus firms and fraudulently availed ITC exceeding Rs. 10 crores.

Held: Considering the completion of investigation, length of custody, maximum punishment of 5 years, absence of likelihood of absconding, and the principles laid down in Sanjay Chandra v. CBI (2012) 1 SCC 40, the Court allowed the application and granted bail with conditions, including personal bond of Rs. 10,000 with one surety, periodic police station attendance, surrender of passport, restriction on travel, and prohibition on tampering with evidence.

The High Court finds failure to afford personal hearing under S.75(4) despite delayed appeal; grants conditional relief — appellate authority to rehear if petitioner secures Rs. 1 crore (after pre-deposit).

Issue: Whether the petitioner, whose appeal under Section 107 of the WBGST/CGST Act was rejected as time-barred, could seek relief by invoking writ jurisdiction on the ground of not being granted an opportunity of personal hearing under Section 75(4) of the Act.

Fact: Proceedings were initiated against the petitioner under Section 61 of the Act for discrepancies, later followed by a show-cause notice under Section 73 covering July 2017–March 2018. The adjudicating authority determined tax, interest, and penalty totaling Rs.11.21 crore. The petitioner filed appeal with a delay of 391 days, depositing Rs.53 lakh, but the appellate authority rejected it as belated. Despite opportunity, petitioner did not respond to show cause in appeal proceedings. Before the High Court, petitioner contended violation of natural justice due to absence of personal hearing, though this ground was not raised earlier. The Court noted repeated delay, non-payment of dues, and absence of explanation.

Held: The Court held that since the determination was made without compliance of Section 75(4), the petitioner deserved an opportunity of hearing. However, considering the petitioner’s conduct of delaying proceedings and withholding dues, relief was made conditional. The Court directed that if the petitioner secures Rs.1 crore (after adjusting pre-deposit) within four weeks, the appellate authority shall hear and decide the appeal on merits. The writ petition was thus disposed of with these directions.

The High Court orders conditional restoration of GST registration cancelled for non-filing of returns, considering genuine reasons for default and subject to payment of dues and scrutiny of ITC.

Issue: Whether the cancellation of the petitioner’s GST registration for non-filing of GSTR-3B returns without affording an effective opportunity of reply, and after expiry of the appeal period, could be set aside and the registration restored.

Fact: The petitioner, a registered GST taxpayer, regularly filed returns but defaulted in filing GSTR-3B due to the ill health of its Director. A show-cause notice dated 05.01.2024, uploaded only on the GST portal, was not effectively communicated, leading to cancellation of registration on 15.03.2024. The petitioner could not appeal within limitation and sought restoration of registration before the High Court. The respondent argued that revocation was possible only after payment of dues and filing of pending returns.

Held: The Court found the petitioner’s explanation genuine and directed conditional restoration of GST registration. It ordered the respondent to enable filing of returns on the GST portal, while directing the petitioner to file all pending returns with tax, interest, and late fees within four weeks. Payment could not be adjusted against unverified ITC, which was to be utilized only after departmental scrutiny and approval. Non-compliance with these conditions would nullify the benefit. The writ petition was thus disposed of with directions for conditional restoration.

"Writ Petition Filed Challenging the Order Passed Under Section 107 of the WBGST/CGST Act, 2017 Dated 29th August 2024; Court, Referring to Observations in WPA 11681 of 2025, Directs the Matter to be Heard and Grants Six Weeks’ Time for Filing Affidavit-in-Opposition and Four Weeks Thereafter for Reply, With Liberty to Mention."

Premature recovery of entire disputed tax before expiry of appeal period and subsequent rejection of refund held unjustified; Court directs refund of excess amount beyond statutory 20% pre-deposit under Sections 107(6) & 112(8) of WBGST/CGST Act.

Issue: Whether the respondents were justified in recovering the entire disputed tax demand before expiry of the appeal period and in subsequently rejecting the refund claim despite the appellate authority modifying the demand, when only 20% of the disputed tax was legally required to be retained under Sections 107(6) and 112(8) of the WBGST/CGST Act.

Fact: The adjudicating authority passed an order under Section 73 on 14th June 2023. Before expiry of the appeal period, the entire demand was recovered by debiting the petitioner’s credit ledger on 3rd August 2023. The petitioner’s appeal was heard treating the recovery as pre-deposit and partly allowed on 29th August 2024, reducing the demand. Despite representations, the balance amount was not refunded, and the refund application filed in November 2024 was rejected on 11th March 2025 on the ground that no refund order existed.

Held: The Court held that premature recovery before expiry of the appeal period was a grave error and rejection of refund was irrational. Since the statute requires only 20% of the disputed tax as pre-deposit (10% for first appeal and 10% for second appeal), the respondents were bound to refund the balance. Accordingly, the refund rejection order dated 11th March 2025 was set aside and the respondents were directed to re-credit the balance amount within one week.

The Court Permits Restoration of GST Registration Cancelled for Non-Filing of Returns, Subject to Compliance with Rule 22(4) Proviso and Payment of Dues Despite Lapse of Revocation Period

Issue: Whether the petitioner’s GST registration, cancelled under Section 29(2)(c) of the CGST Act, 2017 for non-filing of returns for over six months, can be restored by allowing him to comply with Rule 22(4) proviso by filing pending returns and paying dues, despite expiry of the time limit for revocation application.

Fact: The petitioner, a GST-registered assessee, failed to file returns for over six months, resulting in issuance of a show cause notice dated 14.11.2023 and subsequent cancellation order dated 20.02.2024 by the Superintendent. The petitioner’s attempt to file a revocation application failed due to lapse of statutory time. Citing readiness to furnish pending returns and pay tax, interest, and late fees, the petitioner sought relief under the proviso to Rule 22(4) CGST Rules. The Court noted that cancellation of GST registration has serious civil consequences and referred to a similar case (WP(C) 2793/2025).

Held: The Court held that if the petitioner approaches the proper officer within two months, files all pending returns, and pays all tax dues with interest and late fees, the officer has authority under the proviso to Rule 22(4) CGST Rules to drop proceedings and restore GST registration. Petition disposed with directions to consider such application in accordance with law, with arrears liability preserved and limitation under Section 73(10) computed from the date of judgment (except FY 2024–25 as per Section 44).

Penalty for Goods Without E-Way Bill Modified from Section 129(1)(b) to 129(1)(a) Where Tax Invoice Present and Purchaser’s GST Registration Restored.

Issue: Whether the penalty imposed under Section 129(1)(b) of the GST Act for transporting goods without an e-way bill was justified when the consignment was accompanied by a valid tax invoice and the purchaser’s GST registration, though suspended during transit, was later restored.

Facts: The petitioner’s goods, moving from Delhi to Adilabad, Telangana, were intercepted in Agra without an e-way bill. Authorities imposed penalty under Section 129(1)(b) citing possible tax evasion and suspension of the purchaser’s registration from 22.02.2025. The petitioner argued that the e-way bill could not be generated due to technical glitches, the tax invoice was present, and as per Circular 31.12.2018, the consignor or consignee should be deemed the owner when specified documents accompany goods. The purchaser’s registration was valid at dispatch, suspended during transit, and later restored.

Held: The Court found that absence of an e-way bill at inspection justified attributing intent to evade tax, but since the goods carried a valid tax invoice and the purchaser’s registration was ultimately restored, the case should be treated under Section 129(1)(a) instead of Section 129(1)(b). The writ petition was partly allowed, modifying the orders accordingly.

Writ Petitions Not Entertained; Petitioners Relegated to Appellate Remedy Despite Alleged Bias and Natural Justice Claims

Issue: Whether the Writ Petitions challenging the Orders in Original passed by the Adjudicating Authority can be entertained when an alternate remedy of filing an appeal before the Appellate Authority exists, particularly in light of allegations of bias and denial of natural justice.

Fact: The Petitioners challenged the Orders in Original passed by the Adjudicating Officer, claiming that the same officer who conducted the audit also adjudicated the matter, which they argued violated natural justice (“Nemo judex in causa sua”). They also contended that requests for leading expert evidence and adjournments were summarily denied. Some Petitioners had already filed Appeals before the Appellate Authority. The Respondents argued that full opportunity was provided, no application for expert evidence was formally made, adjournments were not unreasonably denied, and the alternate remedy of Appeal was available and efficacious.

Held: The Court observed that while patent breaches of natural justice may justify bypassing alternate remedies, in this case, the Petitioners had participated in proceedings without raising objections, and no serious prejudice was shown. The issues of alleged bias and denial of opportunity could be addressed in the appellate proceedings. The Writ Petitions were therefore not entertained, and the Petitioners were relegated to filing Appeals before the Appellate Authority within six weeks, with liberty to raise all merits, including bias and denial of natural justice. No costs were imposed.