Writ Jurisdiction Cannot be Invoked to Bypass Statutory Appellate Process [Delhi HC]

The Petitioner, M/s Vallabh Textiles, challenged the orders dated 20.01.2025 (denial of cross-examination), 29.01.2025 (demand order confirming GST liability of Rs. 7.13 crores), and 01.02.2025(imposition of equivalent penalty), under Article 226.

The Petitioner is alleged to have facilitated sales of third-party goods via kaccha ledgers and concealed such transactions, leading to GST evasion.

A Show Cause Notice (SCN) dated 29.05.2024 was issued covering multiple financial years, including 2017–2022, which was previously challenged in W.P.(C) 13855/2024 but dismissed on 03.10.2024.

During adjudication, the Petitioner sought cross-examination of five witnesses whose statements were relied upon in the SCN. This was denied by the adjudicating authority.

Issues Framed

• Whether the denial of cross-examination of witnesses relied upon in the adjudication proceedings violated the principles of natural justice?
• Whether writ jurisdiction under Article 226 is maintainable in light of the availability of an alternative appellate remedy under Section 107 of the CGST Act, 2017?

Petitioner argued that the denial of cross-examination is a violation of natural justice. The impugned orders, including the confirmation of GST liability, penalties, and denial of cross-examination, are arbitrary and unsustainable in law.

Responded favoured the denial of cross-examination was justified, as the statements were corroborative and supported by undisputed documents. Further, the respondent argued that impugned orders are appealable under Section 107 of the CGST Act, and the Petitioner must avail this remedy.

Court’s Decision & Rationale

• The Court acknowledged the prior litigation and clarified that the earlier SCN challenge had already been disposed of.
• It held that the denial of cross-examination does not per se constitute a violation of natural justice, particularly when the statements were corroborated by documentary evidence and the cross-examination sought was general and not linked to specific factual inconsistencies.

The court cited Telestar Travels Pvt. Ltd. v. Special Director of Enforcement (2013) and Sushil Aggarwal v. Principal Commissioner of Customs (2025:DHC:698-DB), emphasising:

• Cross-examination is not an absolute right.
• Prejudice must be demonstrated for it to become essential.

The Court reiterated that writ jurisdiction cannot be invoked to bypass the statutory appellate process, especially when disputed facts are involved.

Finally, the High Court dismissed the writ petition, holding that the petitioner must pursue the appellate remedy.