The Delhi High Court addressed a case involving M/s Siwon Enterprises Pvt. Ltd. and others challenging GST adjudication orders. The Petitioners were investigated for alleged wrongful activities related to GST, including issuing invoices without actual supply and misusing Input Tax Credit. The Department issued Show Cause Notices (SCNs) on June 30, 2025, and passed Orders-in-Original on December 26, 2025, imposing substantial liabilities. The Petitioners contested the evidence, penalties, and the adjudication process, questioning the competence of the officers under Section 122 and the amended pre-deposit requirement under Section 107(6), effective from October 1, 2025.
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The central issue was whether the High Court should intervene under Article 226 despite the statutory appeal option under Section 107. The Court determined that the officer's competence did not demonstrate a clear lack of jurisdiction and should be examined by the appellate authority. The case involved extensive material and factual questions, necessitating detailed examination. The Court emphasized that alternative remedies are not entirely barred by writ jurisdiction, but allegations of jurisdictional or natural justice violations alone do not justify bypassing statutory remedies. The Section 107 appeal was deemed effective.
Regarding pre-deposit, the Court clarified that appeals linked to SCNs issued before October 1, 2025, should adhere to the pre-deposit rules as they were on the SCN dates, not when the Orders-in-Original were issued. This decision ensures that appeals are not dismissed solely because of the timing of the orders.
Order Date - 07 September 2026
Parties: Rohit Garg, Manoj Bansal, Sagar Garg, Rahul Solanki, M/s Siwon Enterprises Pvt. Ltd., Sachin Singhal, Vikrant Singhal, Ravi Garg, Nisha Jain, Gaurav Jain, Krishan Kumar and others Vs Union of India & Ors./concerned GST authorities.
Facts -
- M/s Siwon Enterprises Pvt. Ltd. and the other Petitioners were subjected to GST investigation concerning alleged issuance of invoices without actual supply and wrongful availment/passing on of Input Tax Credit. The Department relied on statements, electronic material and records recovered during searches.
- The Department issued substantially similar SCNs dated 30.06.2025 and passed Orders-in-Original dated 26.12.2025, imposing substantial tax and penalty liabilities. The Petitioners disputed the allegations and challenged the evidentiary material, penalties and adjudication process.
- The Petitioners also challenged the competence of the officers issuing the Section 122 proceedings, alleging that the required function had not been specifically assigned to them when the SCNs were issued. They further raised objections regarding personal hearing, relied-upon documents and cross-examination.
- A connected issue concerned the amended Section 107(6) pre-deposit requirement, which came into effect from 01.10.2025. Since the relevant SCNs had been issued before that date, the Petitioners argued that the amended requirement should not apply to their appeals.
Issue -
- Whether the High Court should exercise its writ jurisdiction under Article 226 against the GST adjudication orders, despite the statutory appellate remedy under Section 107, particularly in view of the alleged jurisdictional defects, evidentiary issues, natural justice violations and amended pre-deposit requirement?
Order -
- The Court held that the objection regarding the officer's competence did not constitute a patent or self-evident absence of jurisdiction. The question required examination of the CGST statutory scheme, Notifications Nos. 02 and 14 and the subsequent Circular dated 27.10.2025, and could therefore be raised before the appellate authority.
- The Court noted that the case involved 629 firms/entities, extensive documentary and electronic material, statements and individual factual questions. Issues such as the genuineness of transactions, evidentiary value, cross-examination, multiple penalties and alleged inconsistencies required detailed factual examination.
- The Court reiterated that although alternative remedy is not an absolute bar to writ jurisdiction, mere allegations of natural justice violation, excess jurisdiction or similar grounds do not automatically justify bypassing the statutory remedy. In the present facts, the Section 107 appellate remedy was considered efficacious.
- On pre-deposit, the Court clarified that appeals arising from SCNs issued before 01.10.2025 would be governed by Section 107(6) as it stood on the respective SCN dates. Such appeals cannot be rejected merely because the Orders-in-Original were passed after 01.10.2025.
