Rajkalpana Travels Pvt. Ltd. Vs Commissioner CGST (Delhi High Court)
Summary : The Delhi High Court, comprising Justice Anil Kshetarpal and Justice Bharat Parashar, disposed of a writ petition filed by M/s Rajkalpana Travels Pvt. Ltd. challenging an Order-in-Original dated 16 March 2026, whereby a demand of ₹4,49,93,111, along with applicable interest and an equivalent penalty, was confirmed under Section 74 of the Central Goods and Services Tax Act, 2017. The petitioner contended that the adjudication order was passed ex parte without an effective opportunity of personal hearing, as notices fixing hearings on 3, 11 and 19 February 2026 were allegedly sent to an incorrect email address instead of its registered email address. The Department maintained that the hearing notices had been duly emailed to the address available in its records and had not bounced back. The Court acknowledged that violation of natural justice is a recognised exception to the rule requiring exhaustion of an alternative statutory remedy, as reiterated by the Supreme Court in Assistant Commissioner of State Tax and Others v. Commercial Steel Limited (2022) 16 SCC 447.
However, it observed that merely invoking natural justice does not automatically dispense with the requirement of pursuing the statutory remedy. The competing claims concerning email service, registration particulars, communication of virtual hearing links and time slots, and consideration of the taxpayer’s explanations involved factual questions appropriately examinable by the appellate authority. Having regard to the efficacious remedy under Section 107 of the CGST Act, the Court relegated the petitioner to the statutory appeal without expressing any opinion on the merits of the demand or rival contentions. All contentions were left open. The Court also clarified that an application under Section 14 of the Limitation Act, 1963, seeking exclusion of the period spent pursuing the writ petition, would be considered by the appellate authority in accordance with law.
Cases Discussed
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. Through the present Writ Petition, the Petitioner assails the Order-in-Original dated 16.03.20261, passed by the Respondent under Section 74 of the Central Goods and Services Tax Act, 20172, whereby a demand of Rs.4,49,93,111/- has been confirmed against the Petitioner, along with applicable interest and an equivalent penalty. The Petitioner seeks quashing of the Impugned Order, principally on the ground that the same was passed ex parte, without affording an effective opportunity of personal hearing.
2. At the outset, it deserves notice that the Impugned Order is appealable under Section 107 of the CGST Act. The statutory scheme provides a mechanism for challenging an order passed by the adjudicating authority, enabling the appellate authority to examine the legality and correctness of the determination, including questions of fact and law arising therefrom.
3. The controversy in the present Writ Petition centres around the service of notices fixing personal hearings during the adjudication proceedings. While the Petitioner contends that no such notices were served at its correct and registered email address, the Respondent maintains that the notices were duly communicated to the email address available in their records. The Petitioner has, in support of its contention, relied upon a screenshot of an email and asserted that the email address to which the notices were sent was incorrect and that its email particulars had been updated.
4. In order to appreciate the controversy involved in the present Writ Petition, the relevant facts, in brief, are required to be noticed.
5. The Petitioner states that an audit for the financial years 2019-20 to 2023-24 was undertaken by the Department under Section 65 of the CGST Act. In the course of the audit, an Audit Memo dated 06.09.2025 was issued raising certain discrepancies concerning, inter alia, alleged short payment of tax, classification of services and availment of input tax credit.
6. The Petitioner submitted its response to the Audit Memo vide communication dated 17.09.2025, explaining its position with respect to the observations raised by the Department. Thereafter, a Final Audit Report in Form GST ADT-02 dated 19.09.2025 was issued. An intimation in Form GST DRC-01A dated 23.09.2025 was subsequently issued, communicating the proposed tax liability arising from the audit observations.
7. Thereafter, Show Cause Notice dated 29.09.20253 was issued to the Petitioner under Section 74 of the CGST Act, proposing recovery of tax, along with applicable interest and penalty. The proceedings culminated in the passing of the Impugned Order dated 16.03.2026, confirming the demand against the Petitioner.
8. The Impugned Order records that opportunities of personal hearing were fixed for 03.02.2026, 11.02.2026 and 19.02.2026. According to the Petitioner, however, no notice intimating the aforesaid dates of hearing was received either through email, physical mode or on the GST portal. The Petitioner, therefore, contends that the adjudication proceedings were concluded ex parte without affording it a meaningful opportunity to present its defence.
9. Aggrieved by the Impugned Order, the Petitioner has approached this Court seeking its quashing, together with a direction to the Respondent to afford an effective opportunity of hearing and pass a fresh order after considering the Petitioner’s submissions.
10. Heard learned counsel representing the parties and, with their able assistance, perused the paper book.
11. Learned counsel representing the Petitioner submits that the Impugned Order has been passed in violation of the principles of natural justice, without affording an effective opportunity of personal hearing. It is contended that the demand has been confirmed without due consideration of the Petitioner’s explanations. In support, learned counsel relies upon a screenshot of an email and the Petitioner’s GST registration particulars, asserting that the hearing notices were sent to an incorrect email address, namely, [email protected], whereas the registered email address is [email protected]. It is further submitted that the Respondent has not established valid service in accordance with Section 169 of the CGST Act or demonstrated that the links and time slots for the proposed virtual hearings were duly communicated.
12. Per contra, learned counsel representing the Respondent opposes the Writ Petition on the ground that the Petitioner has an efficacious alternative remedy under Section 107 of the CGST Act. On merits, it is submitted that three opportunities of personal hearing were fixed for 03.02.2026, 11.02.2026 and 19.02.2026, and the corresponding notices were duly sent to the email address available in the Department’s records through emails dated 02.02.2026, 05.02.2026 and 16.02.2026, which did not bounce back. The Respondent contends that the Petitioner failed to avail these opportunities and did not file a reply to the SCN, and that the adjudicating authority was, therefore, justified in proceeding on the basis of the material available on record.
13. In Rejoinder, learned counsel representing the Petitioner disputes that the mere dispatch of emails, or their not having bounced back, establishes valid service. It is submitted that the correctness of the email address and the service of the hearing notices must be examined with reference to the relevant registration particulars and contemporaneous communications.
14. No other submissions have been advanced by learned counsel representing the parties.
15. This Court has considered the submissions advanced on behalf of the parties and perused the material placed on record.
16. The rule concerning the exhaustion of an alternative statutory remedy is well settled. Ordinarily, where the legislature has provided an efficacious appellate mechanism for redressal of grievances arising from an adjudication order, the High Court would exercise restraint in entertaining a challenge to such order under Article 226 of the Constitution. Such restraint is not founded upon an absence of constitutional jurisdiction, but upon the settled principles governing the discretionary exercise of that jurisdiction, particularly where the statute provides a specialised mechanism for examination of the controversy.
17. At the same time, the existence of an alternative remedy does not constitute an absolute bar to the exercise of writ jurisdiction. In Assistant Commissioner of State Tax and Others v. Commercial Steel Limited4, the Supreme Court reiterated that the High Court may entertain a Writ Petition notwithstanding the availability of an alternative remedy in recognised circumstances, including breach of fundamental rights, violation of the principles of natural justice, proceedings undertaken in excess of jurisdiction, or a challenge to the vires of the legislation. The applicability of any such exception, however, has to be examined in the context of the facts and circumstances of the individual case.
18. The mere invocation of the principles of natural justice would not, by itself, dispense with the requirement of ordinarily availing the statutory remedy. The Court must consider the nature of the grievance raised, the material relied upon in support thereof and whether the controversy can appropriately be examined by the statutory appellate authority.
19. In the present case, the principal grievance urged by the Petitioner concerns the alleged non-service of notices fixing personal hearings. The Petitioner contends that the email address to which the notices were sent was incorrect and that the email particulars reflected against its GST registration were different. In support of this contention, reliance has been placed upon a screenshot of an email and the registration particulars stated to be available on the GST portal.
20. The Respondent, on the other hand, asserts that notices of personal hearing were issued on three separate occasions and communicated to the email address available in their records. It relies upon the email communications dated 02.02.2026, 05.02.2026 and 16.02.2026, and contends that the emails were not returned undelivered. The Respondent consequently maintains that the Petitioner was afforded sufficient opportunities to participate in the adjudication proceedings but failed to avail the same.
21. It is, therefore, evident that the parties have taken competing positions on a matter which has a direct bearing on the Petitioner’s grievance of denial of an opportunity of hearing. The question is not merely whether emails were dispatched by the Respondent, but whether the notices were communicated in accordance with the applicable statutory provisions and to the relevant email address attributable to the Petitioner at the material time. The Petitioner’s assertion that its email particulars had been updated, and the Respondent’s reliance upon the address available in their records, would have to be considered in the light of the relevant registration particulars and contemporaneous communications.
22. The screenshot relied upon by the Petitioner is required to be considered in its proper factual context. Equally, the email communications relied upon by the Respondent and the registration particulars maintained by the Department would be relevant in determining whether the notices were sent to the email address registered against the Petitioner’s GST registration.
23. This Court is conscious that the Petitioner has sought to characterise the aforesaid dispute as a violation of the principles of natural justice, relying upon Section 75(4) of the CGST Act and the judicial precedents.
24. The decisions relied upon by the Petitioner underscore the importance of compliance with the principles of natural justice in proceedings having civil consequences. However, the applicability of those decisions to the present controversy would have to be considered in the context of the facts established on record. The existence of a dispute on these aspects does not, by itself, require this Court to undertake a detailed factual inquiry in the exercise of writ jurisdiction when a statutory appellate remedy is available.
25. The Petitioner has also questioned whether the relevant links and time slots for the proposed virtual hearings were communicated to it. The Respondent, on the other hand, maintains that the hearing notices were duly issued and that the Petitioner failed to participate. The extent to which the hearing notices were communicated, and whether the procedure adopted afforded a meaningful opportunity of hearing, are issues that may be examined by the appellate authority upon consideration of the relevant record.
26. In this regard, it is also relevant to notice that the Petitioner has questioned the manner in which the audit observations and the explanations furnished in response to the Audit Memo were dealt with in the proceedings culminating in the Impugned Order. The Petitioner alleges that the demand has been confirmed mechanically, without due consideration of the facts and material placed before the Department. The Respondent disputes these allegations and maintains that the adjudication was undertaken in accordance with law.
27. The aforesaid contentions, insofar as they concern the consideration of the Petitioner’s explanations, the basis of the demand and the correctness of the determination under Section 74 of the CGST Act, are also matters which may be urged before the statutory appellate authority. This Court does not consider it appropriate, in the present proceedings, to enter into the merits of the tax demand or to return findings on the correctness of the adjudication when the Petitioner has an efficacious appellate remedy available.
28. In view of the availability of the statutory remedy under Section 107 of the CGST Act, and having regard to the nature of the controversy raised, this Court is of the opinion that the Petitioner may appropriately pursue its grievances before the appellate authority. All contentions, including those concerning the service of notices, the alleged violation of Section 75(4) of the CGST Act, the consideration of the Petitioner’s explanations and the merits of the demand, are left open to be urged in accordance with law.
29. In view of the foregoing discussion, the Petitioner is relegated to the statutory appellate remedy available under Section 107 of the CGST Act. The present Writ Petition is disposed of accordingly, without expressing any opinion on the merits of the Impugned Order or the rival contentions raised by the parties.
30. It is clarified that all contentions are left open to be raised before the appellate authority, which shall consider the same independently and in accordance with law. The pending application also stands disposed of.
31. It is further clarified that, in the event the Petitioner files an application under Section 14 of the Limitation Act, 1963, seeking exclusion of the period during which the present Writ Petition remained pending, the same shall be considered by the appellate authority in accordance with law.
Notes:
1Hereinafter, the ‘Impugned Order’
2Hereinafter, the ‘CGST Act’
3 Hereinafter, the ‘SCN’
4 (2022) 16 SCC 447
