Case Law Details
MHJ Metaltechs Pvt. Ltd. Vs Central Goods and Services Tax (Supreme Court of India)
Summary: The Supreme Court of India in MHJ Metaltechs Pvt. Ltd. v. Central Goods and Services Tax, Delhi [SLP (Civil) Diary No. 33710/2025, order dated September 8, 2025] upheld that the limitation of three adjournments under Section 75(5) of the Central Goods and Services Tax (CGST) Act, 2017, is mandatory but does not create a right to demand all three adjournments. The Court further held that denial of adjournments beyond the statutory limit and the supply of illegible documents during proceedings do not, by themselves, amount to a violation of natural justice. The Bench declined to exercise its discretionary jurisdiction under Article 136 of the Constitution since the petitioner had an adequate statutory appellate remedy under the GST law.
The case originated when MHJ Metaltechs Pvt. Ltd. was alleged to have fraudulently availed Input Tax Credit (ITC) of ₹7.08 crores, forming part of a wider GST fraud of ₹155 crores. During adjudication by the Central GST authorities in Delhi, the petitioner sought multiple adjournments and alleged that the documents provided were illegible. The adjudicating authority limited adjournments to three in compliance with Section 75(5) of the CGST Act and proceeded to pass an adverse order. The petitioner challenged this before the Delhi High Court through W.P.(C) 5771/2025, arguing violation of natural justice.
Delhi HC Judgment: Mhj Metaltechs Private Limited Vs Central Goods And Services Tax Delhi South (Delhi High Court); W.P.(C) 5771/2025; 22/05/2025
The Delhi High Court, in its judgment dated May 22, 2025, upheld the adjudication, observing that Section 75(5) expressly restricts the number of adjournments to three but does not require the authority to grant all three as a matter of right. The Court also found that supply of partially illegible documents did not vitiate the proceedings in the absence of proven prejudice. Aggrieved by this finding, MHJ Metaltechs approached the Supreme Court under Article 136, seeking intervention.
The Supreme Court condoned a 29-day delay in refiling the petition but declined to interfere. It observed that the matter did not warrant invocation of extraordinary jurisdiction since adequate statutory remedies were available through appeal under Sections 107 and 108 of the CGST Act. The Court affirmed the Delhi High Court’s interpretation that the “maximum of three adjournments” clause in Section 75(5) sets an upper limit rather than a guarantee, and that discretion remains with the adjudicating officer. The Court also clarified that procedural deficiencies, like illegible documentation, do not automatically invalidate proceedings unless material prejudice is shown. The Special Leave Petition was dismissed with liberty to the petitioner to pursue statutory remedies before the Appellate Authority, extending the time for filing appeal until October 15, 2025.
This ruling aligns with prior judicial views emphasizing the statutory framework for adjudication under the GST law. It echoes the principle recognized in Union of India v. Coastal Container Transporters Association [(2019) 20 SCC 446], where the Supreme Court held that procedural flexibility must be exercised within statutory constraints. The decision also follows the reasoning in Oryx Fisheries Pvt. Ltd. v. Union of India [(2010) 13 SCC 427], reinforcing that natural justice requires fairness but not endless procedural indulgence.
The judgment clarifies that Section 75(5) aims to balance administrative efficiency and fairness, discouraging dilatory tactics while allowing sufficient opportunity to defend. By refusing to expand Article 136 jurisdiction when statutory recourse remains open, the Supreme Court reaffirmed judicial restraint in tax disputes. The order thus sets a precedent for adherence to procedural discipline in GST adjudication without compromising the core principles of fairness and reasonableness.
Facts:
MHJ Metaltechs Pvt. Ltd. (“the Petitioner”) is an assessee against whom a show cause notice and adjudication order were passed by the Central Goods and Services Tax (CGST), Delhi (“the Respondent”) alleging fraudulent availment of Input Tax Credit (ITC) to the tune of Rs. 7.08 Crores as part of a larger GST fraud amounting to Rs. 155 Crores. The Petitioner filed replies and sought adjournments during the proceedings.
The Respondent contended that the adjudication proceedings were conducted in accordance with law, including the provisions under Section 75(5) of the CGST Act, which limits the number of adjournments to a maximum of three. The Respondent argued that all procedural requirements were complied with, and illegible documents supplied to the Petitioner did not invalidate the proceedings.
The Petitioner contended that denial of more than three adjournments and supply of illegible documents amounted to violation of natural justice. The Petitioner approached the Delhi High Court through writ petition challenging the adjudication order and sought relief.
The Delhi High Court upheld the Respondent’s adjudication order interpreting Section 75(5) as limiting adjournments to three maximum but not mandating that all three adjournments must be granted. The High Court also held that the supply of illegible documents did not vitiate the proceedings. The Petitioner then filed a Special Leave Petition before the Supreme Court under Article 136 challenging the High Court’s decision.
Issue:
Whether the discretionary jurisdiction of the Supreme Court under Article 136 is to be exercised to interfere with adjudication proceedings upholding limitation on adjournments under Section 75(5) of the CGST Act and denial of natural justice claim when statutory appellate remedy is available?
Held:
The Hon’ble Supreme Court in SLP Civil Diary No. 33710/2025 held as under:
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- Observed that, the delay of 29 days in refiling the petition was condoned.
- Noted that, the case was not fit for exercise of discretionary jurisdiction under Article 136 of the Constitution of India as adequate statutory appellate remedies are available under Sections 107 and 108 of the CGST Act.
- Held that, the Delhi High Court’s interpretation of Section 75(5) CGST valid, as it contemplates a maximum of three adjournments but does not mandate granting all three.
- Held that, the supply of illegible documents during proceedings does not vitiate the adjudication process or violate principles of natural justice.
- Held that, the petitioner has liberty to avail statutory remedies by way of appeal before the Appellate Authority extending the time for filing appeal up to October 15, 2025 and dismissed the Special Leave Petition.
Our Comments:
The Supreme Court’s dismissal of the SLP reinforces judicial caution in exercising extraordinary jurisdiction under Article 136 when effective statutory remedies are accessible. The Court’s endorsement of the High Court’s interpretation of Section 75(5) of the CGST Act, aligns with the legislative intent to balance procedural fairness with administrative efficiency by limiting adjournments to a maximum of three without guaranteeing concession of all.
The judgment also clarifies that procedural irregularities like supply of illegible documents, without resulting prejudice impacting fairness, do not amount to infraction of natural justice principles. This affirms settled jurisprudence that not every procedural infirmity invalidates proceedings absent demonstration of substantial injustice.
Relevant Provision:
Section 75(5) of the Central Goods and Services Tax Act, 2017:
“The proper officer shall, if sufficient cause is shown by the person chargeable with tax, grant time to the said person and adjourn the hearing for reasons to be recorded in writing:
Provided that no such adjournment shall be granted for more than three times to a person during the proceedings.”
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
1. The delay of 29 days in refiling the present petition is condoned. Accordingly, I.A. No. 207474/2025 is allowed.
2. Heard learned senior counsel for the petitioner.
3. In the facts and circumstances of the case, we are not satisfied that it is a fit case to exercise our discretionary jurisdiction under Article 136 of the Constitution of India.
4. The present petition is, accordingly, dismissed with liberty to the petitioner to avail the alternative statutory remedies.
5. The time period for filing the appeal granted by the High Court till 15.07.2025 is extended upto 15.10.2025.
6. Pending application(s), if any, shall stand disposed of.
(Author can be reached at info@a2ztaxcorp.com)
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