Bitumix India LLP Vs Union of India And 6 Ors. (Gauhati High Court)
Summary : The Gauhati High Court directed the GST authorities to refrain from taking further coercive measures against Bitumix India LLP until 27 November 2026. The LLP challenged the Order-in-Original dated 10 July 2025, which confirmed an input tax credit demand of ₹2,00,53,295 along with interest and penalty, and the Order-in-Appeal dated 31 August 2026, which dismissed its appeal under Section 107 of the CGST Act.
The petitioner argued that the Appellate Authority recorded but did not decide its contention that the third scenario in CBIC Circular No. 171/03/2022-GST dated 6 July 2022 applied. According to the petitioner, that scenario attracted penalty under Section 122 rather than demand proceedings under Section 74 of the CGST Act. Relying on Simplex Castings and Indian Oil Corporation, the petitioner submitted that the circular, issued under Section 168, bound both the adjudicating and appellate authorities. The Revenue argued that the second scenario applied and that the factual disputes should be examined in an appeal under Section 112.
The Court held that the matter required consideration and issued notice returnable on 27 November 2026. It left the maintainability of the writ petition and the applicability of the competing scenarios open. Having regard to the submissions on the binding nature of the circular, it restrained further coercive action under both challenged orders until the returnable date. Counsel for the respondents accepted notice, and the Court directed the petitioner to supply copies of the petition and annexures within two working days.
Advocates for the Petitioner: Dr. Ashok Saraf, Mr. P. Baruah, Mr. A. Kaushik, Mr. B. Sarma, Mr. P. K. Bora and Mr. N. N. Dutta.
Cases Discussed
- (2003) 5 SCC 528 — Simplex Castings Ltd. Vs Commissioner of Customs, Vishakhapatnam (Supreme Court of India). The petitioner cited this decision to argue that a circular issued under statutory authority binds the Revenue.
- (2004) 3 SCC 488 — Commissioner of Customs Vs Indian Oil Corporation Ltd. and Another (Supreme Court of India). The petitioner cited this decision to argue that Revenue authorities cannot take a position contrary to a binding instruction issued by the competent authority.
FULL TEXT OF THE JUDGMENT/ORDER OF GUWAHATI HIGH COURT
Heard Dr. A. Saraf, learned Senior Counsel assisted by Mr. A. Kaushik, learned counsel for the petitioner; Mr. S.S. Roy, learned Central Government Counsel for the respondent no. 1; Mr. S. Chetia, learned Standing Counsel, CGST for the respondent nos. 2, 3, 4 & 5; and Mr. B. Choudhury, learned Standing Counsel, Finance & Taxation Department, Government of Assam for the respondent nos. 6 & 7.
2. The petitioner who is a taxable person under Central Goods and Services Tax Act, 2017 [‘the CGST Act’, for short], has assailed an Order-in-Appeal dated 31.08.2026 passed under Section 107, CGST Act and an Order-in-Original dated 10.07.2025 passed by the Adjudicating Authority under Section 74, AGST Act. By the Order-in-Original, the Adjudicating Authority confirmed a demand of Input Tax Credit of Rs. 2,00,53,295/- along with interest and penalty under Section 74, CGST Act. The appeal preferred by the petitioner under Section 107, CGST Act has been dismissed by the Order-in-Appeal dated 31.08.2026.
3. It is the contention of the petitioner that the petitioner raised a ground in the appeal to the effect that the CBIC Circular no. 171/03/2022-GST dated 06.07.2022 issued by the CBIC under Section 168, CGST Act, which has contemplated three situations, and in the case of the petitioner, it is the 3rd situation which is applicable, and not the 2nd situation.
4. Dr. Saraf has contended that the Appellate Authority though taken note of the ground raised by the petitioner in its appeal regarding existence of 3rd situation in the case of the petitioner but it has not decided the said issue in the appeal. He has contended that the Circular dated 06.07.2022 is binding on the Adjudicating Authority as well as on the Appellate Authority. An appeal decided in ignorance of the Circular dated 06.07.2022 issued under Section 168, CGST Act either by the Adjudicating Authority or by the Appellate Authority is ab-initio bad. It is contended that in the event it is the 3rd situation, the Circular has emphasized that no action under Section 74, CGST Act is to be taken as it comes within the purview of Section 122, CGST Act.
5. On the other hand, Mr. Chetia, learned Standing Counsel, CGST has contended that it is the 2nd situation envisaged in the Circular dated 06.07.2022 that is applicable in the case of the petitioner, and not the 3rd situation as contended on behalf of the writ petitioner. He has further contended that complex questions of fact are involved and therefore, the petitioner should be relegated to prefer an appeal under Section 112, CGST Act.
6. In response, Dr. Saraf has contended that in the decisions of the Hon’ble Supreme Court of India in Simplex Castings Ltd. vs. Commissioner of Customs, Vishakhapatnam, [2003] 5 SCC 528; and Commissioner of Customs vs. Indian Oil Corporation Ltd. and another, [2004] 3 SCC 488, it has been authoritatively held that a Circular issued in exercise of statutory power under the concerned Act is binding on the revenue authorities and the revenue authorities cannot be permitted to take a stand contrary to instruction issued by the competent authority, like the CBIC in the case in hand.
7. The matter would require consideration.
8. Issue notice, returnable on 27.11.2026.
9. As all the respondents are duly represented by their respective learned counsel and they have accepted notices on behalf of the respondents, issuance of formal notice to the respondents is dispensed with. The learned counsel for the petitioner shall furnish requisite nos. of extra copies of the writ petition along with annexures to the learned counsel for the respondents within 2 [two] working days from today.
10. Keeping the entertainability and/or maintainability of the writ petition open, and having regard to the projections made regarding binding nature of the Circular dated 06.07.2022, it is observed, in the interim that the respondent authorities shall not take any further coercive measures against the petitioner pursuant to the Order-in-Appeal dated 31.08.2026 and the Order-in-Original dated 10.07.2025, till the returnable date.
