DK Enterprises Vs Union of India (Delhi High Court)
The Delhi High Court considered a writ petition challenging an order dated 03.02.2025 by the Additional Commissioner (Adjudication), Central Goods and Services Tax, Delhi, raising a demand of approximately Rs.64 crores on the ground that the petitioner had wrongly availed Input Tax Credit (ITC) based on fake invoices. The Court noted that two earlier writ petitions filed by the petitioner had already been disposed of by relegating the petitioner to the statutory appellate remedy under Section 107 of the Central Goods and Services Tax Act, 2017.
The petitioner submitted that Section 107(11) of the CGST Act does not empower the Appellate Authority to remand matters to the Adjudicating Authority and contended that the writ petition should be entertained because no opportunity for cross-examination of witnesses had been provided during adjudication. The petitioner also submitted that payment of Rs.64 crores had not been duly considered by the Adjudicating Authority.
Referring to Section 107(11) of the CGST Act, the Court observed that while the Appellate Authority cannot remand a matter to the Adjudicating Authority, it is expressly empowered to undertake such further inquiry as may be necessary before deciding the appeal. The Court further observed that this power is sufficiently wide to permit cross-examination of witnesses wherever considered necessary for a just adjudication. It also observed that the Appellate Authority, being the first appellate forum, has ample powers to confirm, modify, or annul the impugned order and to examine both factual and legal issues, including the grievance regarding denial of cross-examination. The Court noted that the impugned order had recorded consideration of the petitioner’s contention regarding payment of Rs.64 crores and observed that the Appellate Authority was competent to re-examine that issue while deciding the appeal.
