High Court Holds Writ Jurisdiction Cannot Replace Statutory Appeal Where GST Dispute Requires Factual Examination:

The Delhi High Court has declined to exercise writ jurisdiction in a batch of petitions filed by RPP Infra Projects Ltd. challenging a common GST adjudication order dated February 4, 2025, passed by the Additional Commissioner, Adjudication, DGGI. The company has separate GST registrations in Karnataka, Tamil Nadu and Telangana, against which separate demands were confirmed.

The proceedings arose from a DGGI investigation into an alleged chain of invoices issued without corresponding supplies. According to the Department, ITC was passed through Club Axe Clothing, Footprints and Disha Traders to Univista Contractors Ltd., which passed the credit to several recipients, including RPP Infra Projects. The common Show Cause Notice involved 95 noticees.

RPP Infra Projects, however, disputed the Department's allegations and submitted that Sunil Hitech Engineers Ltd. had awarded construction work to it, which was later subcontracted to Univista Contractors Ltd. on a back-to-back basis. The impugned order confirmed a demand of Rs. 2,62,74,687 against the Karnataka registration, Rs. 10,57,452 against the Tamil Nadu registration and Rs. 2,94,30,991 against the Telangana registration. Interest under Section 50 and penalties, including a further penalty of Rs. 50,000 under Section 122(3)(a) of the CGST Act read with Section 20 of the IGST Act, were also imposed.

Before the High Court, the argued contended that its detailed reply dated April 17, 2024 and supporting documents had not been considered, rendering the order contrary to Sections 74(9) and 75(6) of the CGST Act.

The Court noted that the order was appealable under Section 107 of the CGST Act. Therefore, the principal question was whether the objections raised by RPP Infra Projects justified bypassing the statutory appellate remedy. The Court held that examining whether the documents actually established the petitioner's case would require matching the work orders, subcontracts, invoices, payments and evidence of execution in each State. Such an exercise involved appreciation of a voluminous factual record and could effectively be undertaken by the statutory Appellate Authority.

Accordingly, the Delhi High Court declined to interfere with the impugned adjudication order under Article 226 of the Constitution and relegated RPP Infra Projects Ltd. to the statutory remedy of appeal under Section 107 of the CGST Act.