Facts of the Case:

In this case, the petitioner challenged an Order-in-Original passed by the Central GST authorities primarily on the ground that the proceedings were barred by Section 6(2)(b) of the CGST Act, 2017. The petitioner contended that the State GST authorities had earlier examined the very same documents and transactions in proceedings under Section 73 of the Act and had closed the matter without raising any demand. Despite such closure, the Central GST authorities initiated proceedings under Section 74 of the Act based on the same set of documents and evidence.

The petitioner argued that the documents which had persuaded the State GST authorities to drop the proceedings were furnished before the Central GST authorities as well, but were not properly considered. It was further alleged that the authorities intended to rely upon additional documents without issuing any notice to the petitioner for production thereof. The petitioner also contended that adequate opportunities of personal hearing were not provided and that only two out of four scheduled hearings were effectively granted. On these grounds, the petitioner alleged violation of principles of natural justice and Article 14 of the Constitution.

The respondents opposed the writ petition by raising a preliminary objection regarding maintainability, contending that the CGST Act provides an effective statutory appellate remedy. They further argued that proceedings under Sections 73 and 74 operate in different fields and involve distinct statutory considerations. It was also submitted that issues relating to appreciation of evidence and adequacy of opportunity could appropriately be examined by the appellate authority.

Issue:

Whether initiation and adjudication of proceedings under Section 74 of the CGST Act are barred when the State GST authorities have already closed proceedings under Section 73 on the basis of the same documents.

Held that:

The Court dismissed the writ petition and relegated the petitioner to the statutory appellate remedy available under the CGST Act.

The Court held that Sections 73 and 74 of the CGST Act operate in different fields and are founded upon different statutory considerations. Merely because the petitioner was exonerated in proceedings under Section 73 by the State GST authorities does not automatically preclude the Central GST authorities from initiating or continuing proceedings under Section 74. The Court observed that both provisions have distinct scopes, requirements and consequences, and therefore an order passed under Section 73 cannot by itself render proceedings under Section 74 invalid.

The Court further held that the evidence and documents produced by the petitioner were independently available for examination by the adjudicating authority. Whether such evidence was properly appreciated or not is essentially a matter relating to appreciation and re-appreciation of facts, which falls within the domain of the appellate authority rather than the writ court.

The Court rejected the petitioner’s argument that once the State GST authorities found the documents sufficient to close proceedings, the Central GST authorities were bound to arrive at the same conclusion. The Court clarified that each competent authority is entitled to independently evaluate the evidence and reach its own conclusion in accordance with law.

The Court also observed that the appellate authority possesses wide powers to re-appreciate evidence and, where necessary, permit production of additional evidence. Consequently, grievances relating to non-consideration of documents, insufficiency of opportunity, or erroneous appreciation of evidence can effectively be addressed in appeal.

The Court further held that the requirement of statutory pre-deposit cannot be treated as a valid ground to bypass the appellate mechanism provided under the statute. The existence of an effective alternate remedy barred invocation of writ jurisdiction in the facts of the case.

Accordingly, the writ petition was dismissed with liberty to the petitioner to avail the statutory appellate remedy.

Case name: M/s. Pei Industries, M/s. Maa Jagdambe Engg Works, M/s. Ansh Associates Versus Union of India, Commissioner of Central Goods And Services Tax Delhi, Additional Commissioner (Adjudication) CGST Delhi East Commissionerate, Commissioner of Trade & Taxes Department of Trade & Taxes, New Delhi, Assistant Commissioner / GST Officer Delhi. dated 29.05.2026