Case Law Details
Saurabh Kumar Gupta Vs Union of India (Allahabad High Court)
The Allahabad High Court dismissed the writ petition challenging the order dated 30.12.2025 passed by the Deputy Commissioner, CGST & Central Excise, Division-I, Lucknow, whereby a penalty of ₹38,12,904 was imposed upon the petitioner under Section 122(1)(A) of the CGST Act, 2017.
The case arose from intelligence gathered by the authorities indicating that M/s Maa Ambey Distributors had procured fake invoices from M/s C.B. Traders and had availed and utilized inadmissible Input Tax Credit (ITC) on the basis of such invoices. The matter was investigated by officers of the Directorate General of GST Intelligence (DGGI), Lucknow, who conducted searches at both firms.
During the investigation, the petitioner’s statement was recorded under Section 70 of the CGST Act, wherein he admitted that both firms were being operated by him. Based on the intelligence report, proceedings under Section 74 of the CGST Act were initiated. Show cause notices were sent to the petitioner through registered speed post. However, the petitioner neither appeared before the authorities nor submitted any response to the notices. Consequently, the proceedings were finalized and the impugned penalty order was passed.
The petitioner contended before the High Court that the order violated Section 75(4) of the CGST Act because no opportunity of hearing had been provided to him, as the show cause notice had not been uploaded on the GST portal.
The Court observed that service of notice through registered post is one of the recognized modes of service under Section 169 of the CGST Act, 2017. It further noted that the petitioner had participated during the search proceedings and that his statement recorded during the investigation formed the basis for imposing the penalty. Although the petitioner asserted that he had never received the show cause notice, the respondents disputed this claim.
The Court held that the petitioner had an effective alternative remedy by way of an appeal under Section 107 of the CGST Act, where all admissible grounds could be raised. Relying upon the Supreme Court’s decision in Commissioner of Income Tax and others vs. Chhabil Dass Agarwal, the High Court reiterated that in taxation matters, where a statutory remedy is available, the aggrieved person should ordinarily pursue such remedy instead of invoking writ jurisdiction under Article 226 of the Constitution.
Accordingly, the writ petition was dismissed on the ground of availability of an alternative statutory remedy.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Memo of appearance filed today by Shri Paavan Awasthi, on behalf of respondent no. 1 is taken on record.
2. Heard Shri Amit Prakash Sharma, learned counsel for the petitioner, Shri Paavan Awasthi, learned counsel for the respondent no. 1 and Shri Anindya Shastri, learned counsel for the respondents no. 2 and 3.
3. By means of the present writ petition the petitioner has assailed validity of order dated 30.12.2025 passed by the Deputy Commissioner, CGST & Central Excise, Division – I, Lucknow thereby imposing penalty of an amount of Rs 38,12,904/- on the petitioner under Section 122(1) (A) of the CGST Act, 2017.
4. It has been submitted on behalf of the petitioner that on the basis of intelligence gathered by the respondents to the fact that M/S Maa Ambey Distributors is involved in procuring fake invoices from M/S C. B. Traders and therefore they are involved in availment and utilisation of inadmissible ITC on the strength of fake invoices.
5. The aforesaid allegations were duly investigated by the officers of the DGGI, Lucknow which conducted search on both the firms. It is during the said investigation that the statement of the petitioner under Section 70 of the CGST Act is also recorded where he accepted that both the firms are operated by the petitioner. On the basis of the intelligence report the assessment proceedings were carried out under Section 74 of the CGST Act 2017 where notices were sent to the petitioner by means of registered speed post. The petitioner did not appear nor filed any response to the show cause notice. Subsequent to which the proceedings were finalised by means of order impugned dated 13.12.2025.
6. Learned counsel for the petitioner submits that the order impugned is violative of section 75(4) in as much as the order has been passed without giving opportunity of hearing to the petitioner as the show cause notice was not uploaded on the portal.
7. Considering the grounds raised by the petitioner it is noticed that sending notices by registered post is one of the methods mentioned in the Section 169 of the CGST Act, 2017 for affecting service on any of the persons and apart from the above we find that the petitioner had duly participated during the search operations and his statement was recorded and the statement of the petitioner was the basis of the penalty imposed upon him though it is the stand of the petitioner that he never received the show cause notice which fact is opposed by learned counsel for the respondent but in any view of the matter we find that the petitioner has an effective remedy of filing of appeal under Section 107 of the CGST Act, 2017.
8. In case the petitioner files an appeal against the order impugned dated 30.12.2025 he will be at liberty to raise all the grounds admissible in such an appeal.
9. Apart from the above this Court is of the considered view that the judgment of Hon’ble Supreme Court in the case of Commissioner of Income Tax and others vs Chhabil Dass Agarwal, (2014) 1 SCC 603 held that in taxing matters where statutory remedy has been provided the aggrieved person should be relegated to the statutory remedy rather than to invoke writ jurisdiction under Article 226 of Constitution of India.
10. In the light of the aforesaid, the writ petition is dismissed on the ground of availability of alternative remedy.
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