PEI Industries Vs Union of India (Delhi High Court)
Exoneration in Section 73 proceedings by State GST authorities would not ipso facto bar Central GST authorities from initiating proceedings under Section 74: Delhi HC
The Delhi High Court, in PEI Industries v. Union of India, held that exoneration by State GST authorities under Section 73 of the Central Goods and Services Tax Act, 2017 does not automatically prevent Central GST authorities from initiating proceedings under Section 74 on the same facts and documents. The Court observed that Sections 73 and 74 operate in distinct fields, with Section 74 dealing specifically with cases involving allegations of fraud, wilful misstatement, or suppression of facts. The petitioner argued that the Central GST proceedings were barred under Section 6(2)(b), that the evidence had already been accepted by State GST authorities, and that principles of natural justice had been violated. Rejecting these contentions, the Court held that appreciation and re-appreciation of evidence fall within the jurisdiction of the appellate authority and not the writ court. It further ruled that the existence of an effective statutory appellate remedy, including mandatory pre-deposit requirements, is not a ground to invoke writ jurisdiction.
Facts:
M/s PEI Industries (“the Petitioner”) was issued a Show Cause Notice (“SCN”) by the Central GST Authorities under Section 74 of the CGST Act, culminating in the Order-in-Original dated March 30, 2026 (“the Impugned Order”) confirming demand of tax along with interest and penalty.
