Vyome Therapeutics Limited Vs Commissioner of CGST (East) Delhi & Ors. (Delhi High Court)
Summary: The Delhi High Court declined to exercise writ jurisdiction over Vyome Therapeutics Limited’s challenge to an adjudication order dated 28.03.2026 on the ground that the applicable starting point for the five-year limitation under Section 74(10) of the CGST Act, 2017 was itself debatable. The petitioner contended that, since the case concerned an erroneous refund, the latter limb of Section 74(10) applied and the order was required to be passed within five years from the date of the erroneous refund. Revenue submitted that the alleged erroneous refund came to light during an audit under Section 65 and that the first limb of Section 74(10) applied, requiring limitation to be computed from the due date for furnishing the annual return for FY 2019-20, which had ultimately been extended to 31.03.2021. The High Court held that Section 74(10) provides different starting points depending upon the nature of the demand and that determining the applicable limb in the present case would require examination of the nature of the demand, underlying proceedings and factual foundation of the adjudication. Since an alternative statutory remedy of appeal was admittedly available, the Court declined to determine the limitation dispute in writ jurisdiction and relegated the petitioner to the statutory appellate remedy. It further observed that if the petitioner sought exclusion under Section 14 of the Limitation Act, 1963 for the period during which the writ petition remained pending, the appellate authority should consider such application pragmatically. Thus, the High Court did not decide which limb of Section 74(10) actually governed the case or whether the adjudication order was barred by limitation. The writ petition and pending application were disposed of.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. The availability of alternative statutory remedy of Appeal against the Impugned Order dated 28.03.2026 is not in dispute.
2. However, learned senior counsel representing the Petitioner contends that the Order was required to be passed within a period of five (05) years from the date of erroneous refund, in terms of the latter limb of Section 74(10) of the Central Goods and Service Tax Act, 2017 [hereinafter referred to as ‘CGST Act’].
3. She further submits that since the Order has been passed beyond the aforesaid period of five (05) years, this Court should entertain the present Writ Petition and the Petitioner ought not to be relegated to the remedy of Statutory Appeal.
4. Per contra, learned counsel representing the Respondent submits that the Petitioner was subjected to audit under Section 65 of the CGST Act and, during the course thereof, it came to the notice of the Department that an erroneous refund had been granted.
5. It is further submitted that in the present case, first limb of sub- Section 10 of Section 74 of the CGST Act would be applicable, which prescribes a period of five (05) years from the due date for furnishing annual return for the relevant financial year. He submits that the relevant financial year is 2019-20 and the due date for furnishing the annual return was initially extended up to 28.02.2021vide Notification No. 95/2020-Central Tax dated 30.12.2020 and, thereafter, up to 31.03.2021videNotification No. 04/2021-Central Tax dated 28.02.2021.
6. In rejoinder, learned senior counsel representing the Petitioner submits that it is not a case of audit but of adjudication.
7. This Court has considered the submissions advanced by learned counsel representing the parties and is of the opinion that it is a debatable as to which limb of Section 74(10) of the CGST Act would be applicable in the facts of the present case. Section 74(10) of the Act contemplates different starting points for computation of limitation depending upon the nature of the demand. In the facts of the present case, there is a dispute as to the applicable starting point for computation of the period of limitation under the said provision.
8. Determination of the aforesaid issue would require examination of the nature of the demand, the underlying proceedings and the factual foundation of the adjudication. In these circumstances, this Court is not inclined to examine the said issue in exercise of its writ jurisdiction. Accordingly, the Petitioner is relegated to the alternative statutory remedy of Appeal.
9. Needless to observe, if the Petitioner files an application under Section 14 of the Limitation Act, 1963 seeking exclusion of the period for which the present Writ Petition has remained pending, the same shall be considered pragmatically by the Appellate Authority.
10. With these observations, the present Writ Petition, along with pending application, is disposed of.
