Rajasthan HC Dismisses GST Writ, Grants 30 Days to Appeal Under Section 107

Innotex (India) Private Limited Vs State of Rajasthan (Rajasthan High Court)

Summary: The Rajasthan High Court, Jaipur Bench, considered a writ petition filed by M/s Innotex (India) Private Limited challenging a GST demand and the subsequent rejection of its rectification application. The petitioner sought quashing of the order dated 03.12.2025 passed under Section 73 of the CGST/RGST Act, 2017, under which tax demand of Rs.2,58,55,445/-, interest of Rs.1,69,26,223/- and penalty of Rs.26,31,862/- were raised, together with the consequential rectification rejection order dated 24.04.2026. The petitioner’s books of accounts, records and returns for FY 2021-22 had been audited, following which Form GST ADT-02 dated 01.09.2025 was issued and Form GST DRC-01 dated 18.09.2025 proposed the demand. The petitioner contended that the order dated 03.12.2025 had merely been uploaded under “Additional Notices and Orders” on the GST portal and had not been manually served or supplied in hard copy.

Its GST affairs had been handled by an accountant whose registered email ID and mobile number remained on the portal even after he had left its service, and the petitioner claimed that it became aware of the proceedings only subsequently. On 03.03.2026, the petitioner filed an application under Section 161, seeking rectification and a personal hearing to place reconciliation and supporting material on record. While that application was pending, the department debited the balance available in the Electronic Credit Ledger and blocked the ledger to the extent of approximately Rs.4.52 crores. The rectification application was rejected on 24.04.2026 on the ground that no error apparent on the face of the record was found, without granting the requested personal hearing. Further, Section 79(1)(c) proceedings were invoked through Form GST DRC-13 dated 12.05.2026 against the petitioner’s bank accounts, directing a hold on Rs.4,54,13,530/- and its remittance towards the demand. The respondents opposed maintainability of the writ petition on the ground that an alternative statutory remedy of appeal under Section 107 of the CGST Act, 2017 was available. The Court reproduced Section 107(1), which provides for an appeal to the Appellate Authority within three months from communication of the decision or order. The High Court declined to directly entertain the writ petition without exhaustion of the alternate statutory remedy and dismissed the petition with liberty to pursue an appeal under Section 107.