High Court Dismisses Writ Against GST ITC Demand; Grants Liberty to File Appeal Without Further Pre-Deposit

The petitioner, who is a registered taxpayer, objected to an order dated 08.04.2025 made by the department under confirmation of discrepancy No. 2 in respect of excess availment of Input Tax Credit (ITC) under GSTR-9 with regard to GSTR-2A for 2017-18. The petitioner had previously encountered a negative order dated 26.12.2023, which was set aside by the Court and remanded for re-examination. On remand, the respondent once again upheld the demand under the same category, believing that the petitioner had failed to establish whether the suppliers had filed their GSTR-1 for March 2019.
Based on that discovery, ITC of IGST Rs. 51,256/-, CGST Rs. 1,12,360/-, and SGST Rs. 1,12,360/- was authorised for recovery, along with penalty under Section 74(1) and interest under Section 50(3) of the GST Act.

The order was later partly modified under Section 161 of the GST enactment. The petitioner submitted that the tax amounting to Rs. 2,75,976/- had already been paid on 18.05.2025 through Form GST PMT-06. It was contended that despite earlier remand directions, the respondent reconfirmed the same dues that had been previously set aside. The department contended that thec was devoid of merit and that the proper remedy lay in filing a statutory appeal.

Main Issue: Whether the writ petition under Article 226 of the Constitution was maintainable when a statutory appellate remedy was available, and whether liberty could be granted to file such an appeal after expiry of the limitation.

Court’s Ruling: The Court noted that the writ petition had been presented by the petitioner on 07.08.2025 but was dated only on 13.10.2025, which also coincidentally was the last date for condoning the delay in filing a statutory appeal. Finding no procedural defect in the challenged order and finding an efficacious alternative remedy available, the Court held that the writ petition was not maintainable under Article 226 of the Constitution.
However, considering that the petitioner had already paid the entire confirmed tax amount, the Court granted liberty to appeal within 15 days from the date of the order without any additional pre-deposit. The appellate authority was directed to dispose of the appeal on the merits after granting due opportunity of hearing. Till disposal, no further recovery was to be made. If the petitioner failed to file the appeal within the stipulated time, the department was given liberty to proceed in accordance with the law. 

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