Filatex India Ltd Vs Additional Commissioner, Central Tax
Date: April 1, 2025
Subject Matter
Adjudicating authorities must carefully consider responses from parties instead of merely reiterating arguments from the SCN in their decisions
Summary
Filatex India Ltd. approached the Delhi High Court, challenging an Integrated Goods and Services Tax (IGST)demand issued against it through a petition filed under Articles 226 and 227 of the Constitution of India. The challenge was directed against an order dated January 31, 2025, which confirmed various IGST demands following a Show Cause Notice (SCN) dated January 16, 2023.
Filatex India contended that the SCN and the subsequent Order-in-Original were "almost identically worded," suggesting a lack of proper consideration by the officer responsible for the order. The company asserted it had responded adequately to the SCN, arguing it incurred no tax liability as per the Second Proviso to Rule 28 of the CGST Rules, as clarified in the CBIC Circular No. 199/11/2023-GST.
The High Court, recognizing that the issue required a detailed factual analysis, decided not to entertain the writ petition based on the merits and directed Filatex India to pursue its case before the Appellate Authority under Section 107 of the CGST Act. The Court granted the company 60 days to file the appeal and instructed the Appellate Authority to consider the specific arguments raised, notably the alleged non-application of mind by the original authority.
Additionally, the Court mandated that adjudicating authorities must carefully consider responses from parties in future cases instead of merely reiterating arguments from the SCN in their decisions. The petition was subsequently dismissed, along with any pending applications, with directions for communication of the Court’s order to the relevant GST Commissionerates for compliance.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. This hearing has been done through hybrid mode.
2. Allowed, subject to all just exceptions. Application is disposed of. P.(C) 3602/2025 & CM APPL. 16854/2025
3. The present petition has been filed by the Petitioner under Articles 226 and 227 of the Constitution of India seeking appropriate writ quashing the impugned order dated 31st January, 2025 passed pursuant to Show Cause Notice (hereinafter ‘SCN’) dated 16th January, 2023 by which various demands of IGST have been raised against the Petitioner.
4. The submission of Mr. Ashish Dholakia, ld. Senior Counsel is that the SCN and the Order-in-Original are almost identically worded and it shows that the original authority e., Additional Commissioner, CGST, Delhi East has not applied its mind at all. It is submitted that a reply was, in fact, filed by the Petitioner in the SCN proceedings vide which it had contended that it does not have any tax liability in terms of Rule 28 Second Proviso of CGST Rules read with CBIC Circular No. 199/11/2023-GST dated 17th July, 2023. However, it is the Petitioner’s contention that, though the Order-in-Original mentions it, the same has not been dealt with in an appropriate manner.
5. The Court has considered the matter. It is relevant to note that the impugned order dated 31st January, 2025 is appealable under Section 107 of the Central Goods and Services Tax Act, 2017. Therefore, the issues that are being raised by the Petitioner can also be considered by the Appellate Authority. While there can be no doubt that writ jurisdiction can be exercised in certain cases, since this involves a detailed factual analysis testing the applicability of the said circular as also Rule 28 of CGST Rules to the facts, this Court is not inclined to entertain the present writ petition.
6. The Petitioner is permitted to approach the Appellate Authority under Section 107 within a period of 60 days. The specific contentions captured above shall be considered by the Appellate Authority without being influenced by the findings given in the impugned Order-in-Original.
7. Further, the Adjudicating Authorities under GST, while passing the Order-in-Original, ought to take special note of the responses filed by the parties concerned and deal with the same appropriately and not simply reproduce the contentions in SCNs in their orders.
8. Let the present order be communicated to all the Commissionerates of GST for necessary information and compliance through their legal department at email ID- ccucgstdel-legal@gov.in.
9. Petition is disposed of in these terms. All pending applications, if any, are also disposed of.
10. Copy of the order be sent to the Principal Chief Commissioner of CGST & Central Excise, Delhi Zone (Email- ccu- exdel@nic.in, Ph No.011-23370852).