Delhi HC Directs GST Dispute to Section 107 Appeal, Leaves Jurisdiction Open

Saraswati Printers Vs Directorate General of GST Intelligence (Delhi High Court)

Summary: The Delhi High Court declined to entertain Saraswati Printers’ writ petition challenging a Show Cause Notice dated 03.08.2024 issued by the Directorate General of GST Intelligence, Delhi Zonal Unit under Section 74 of the Central Goods and Services Tax Act, 2017, as well as the consequential Order-in-Original dated 31.01.2025. The Court noted that, when the writ petition was instituted on 14.01.2025, the challenge was directed principally against the Show Cause Notice, but during its pendency the competent Central GST adjudicating authority passed Order-in-Original No. 87/CGST WEST/GST/S GARG/ADC/2024-25 dated 31.01.2025, confirming allegedly ineligible ITC of Rs.5,71,00,237/- under Section 74, along with applicable interest and penalty.

Once the adjudication order had been passed, the statutory scheme provided an efficacious appellate remedy under Section 107 of the CGST Act. The central jurisdictional objection raised by the Petitioner was based on Section 6(2)(b) of the CGST Act, which, according to the Petitioner, barred the DGGI/DZU from initiating proceedings because State GST authorities had already initiated proceedings concerning the same subject matter for financial years 2017-18, 2018-19 and 2019-20. The Respondents disputed this position, submitting that the State proceedings and DGGI investigation differed in their factual foundations, allegations, material and contraventions, and that the DGGI investigation concerned alleged fraudulent availment and utilisation of ITC through bogus invoices without actual supply or movement of goods.