Delhi HC Rejects Writ Against Centralized DGGI Adjudication; Relegates Multi-State ITC Dispute to Statutory Appeal

5-Second Takeaway

The Delhi High Court held that the petitioners’ objections did not justify bypassing the statutory appeal under section 107 of the CGST Act against the DGGI’s common order confirming separate demands for their three GST registrations. The court therefore declined to interfere under Article 226 and disposed of the connected writ petitions.

Facts of the Case: The assessee, a construction company holding GST registrations in Karnataka, Tamil Nadu, and Telangana, was implicated in an intelligence operation by the DGGI involving an alleged chain of goods-less invoices used to pass on fraudulent Input Tax Credit (ITC). The DGGI issued a common show-cause notice to 95 noticees across the country. Because the single highest tax demand in the network pertained to a Delhi-based entity, the entire common notice was allocated to and adjudicated by the Additional Commissioner, CGST Delhi North. The assessee filed writ petitions challenging the resulting adverse assessment orders directly in the High Court, bypassing the normal appellate route. The assessee contended that its detailed replies and evidence of genuine subcontracts were ignored, that the Delhi-based Central officer lacked territorial jurisdiction over its State-registered entities, and that a specific CBIC Circular (171/03/2022-GST) barred the demand under Section 74.

Issue: Whether an assessee can bypass the statutory appellate remedy under Section 107 of the CGST Act to challenge a common adjudication order on grounds of alleged non-consideration of evidence, lack of territorial jurisdiction by a centralized DGGI officer, and misapplication of a CBIC circular

Held:

The Court dismissed the writ petitions and directed the assessee to file a statutory appeal under Section 107 of the CGST Act.

The Court upheld the jurisdiction of the DGGI Delhi North officer, clarifying that DGGI possesses pan-India enforcement powers and that the administrative allocation of a common SCN to the zone handling the noticee with the highest tax demand is a legally valid mechanism

The Court held that the failure to reproduce the assessee's reply in the assessment order does not invalidate the adjudication as long as the basis for rejecting the ITC claim (failure to discharge the burden of proof under Section 155) is disclosed. Evaluating the adequacy of those reasons and determining the true nature of the inward/outward supplies require a deep factual inquiry best suited for the appellate authority.