Delhi High Court declines writ against GST demand; emphasises appeal under Section 107
The Delhi High Court, in Wizard Digitek Computers Pvt Ltd Vs Union of India & Ors. (Delhi High Court), refused to interfere under Article 226 with an adjudication order raising substantial GST demand and directed the assessee to pursue the statutory appellate mechanism under Section 107 of the CGST Act. The judgment reiterates the limited circumstances in which writ jurisdiction can be invoked despite an available appeal and clarifies how objections relating to evidence, natural justice and prior audit are to be dealt with.
Background of the dispute
The writ petition challenged an Order-in-Original dated 29.12.2025 passed under Section 74 of the CGST Act. The order:
- Confirmed a GST demand of Rs.1,41,70,592/- for FY 2018-19 to 2023-24
- Confirmed an additional GST demand of Rs.8,94,692/- for FY 2024-25
- Imposed interest and penalty in terms of the
CGST Act
These proceedings stemmed from an investigation by the Department into the affairs of M/s Arora Communication, whose proprietor is **Mr. Kapil Arora`. During a search at his residence and business premises, the Department claimed to have recovered:
- Electronic data from a seized laptop
- Loose documents and unaccounted receipts (kachcha parchis)
- Statements recorded during investigation
On analysis of this material, the Department alleged that it revealed unreported transactions involving Wizard Digitek Computers Pvt Ltd and issued a Show Cause Notice dated 28.06.2025, culminating in the impugned adjudication order under Section 74.
Statutory remedy under Section 107 of CGST Act
Scope of appellate powers
The Court began by underlining that the impugned order is appealable under Section 107 of the CGST Act. The appellate authority under this provision is empowered to:
- Re-assess both facts and law
- Revisit and re-appreciate evidence on record
- Scrutinise and test the findings of the adjudicating authority
- Examine the overall legality and correctness of the Order-in-Original
Because the Legislature has consciously put in place an adjudicatory hierarchy with a specialised appellate forum, constitutional courts have evolved a practice of self-restraint in entertaining writ petitions against original adjudication orders.
Alternative remedy not an absolute bar – recognised exceptions
The High Court reaffirmed that the presence of an alternative remedy does not absolutely prohibit a writ petition, but the exceptions are narrow. Relying on Assistant Commissioner of State Tax and Others v. Commercial Steel Limited, (2022) 16 SCC 447, the Court restated that a writ may be entertained despite an appeal where:
- There is an alleged breach of fundamental rights
- There is a violation of the principles of natural justice
- The authority has acted without jurisdiction or in excess of jurisdiction
- There is a challenge to the vires of a statute or delegated legislation
At the same time, it stressed that:
A bare assertion of any of these grounds is insufficient. The Court must objectively find that the specific facts indeed disclose such an exceptional circumstance.
Accordingly, the central issue before the Delhi High Court was whether the case of Wizard Digitek Computers Pvt Ltd fell within any of these carve-outs so as to justify bypassing the statutory appeal under Section 107.
Assessee’s contentions before the High Court
Alleged denial of natural justice and defective service
The assessee argued that the adjudication process violated basic principles of natural justice because:
- Effective opportunity of personal hearing was allegedly not given
- Hearing notices were claimed to be improperly served
- The detailed written response to the SCN was allegedly not properly considered
- The authority purportedly acted in a mechanical manner, without independent application of mind
On this basis, the assessee contended that the impugned order stood vitiated and warranted quashing under Article 226, notwithstanding the appeal remedy.