Gauhati High Court on GST Appeals, Limitation and Wrong Legal Remedy under Section 107
Background of the Dispute
The Gauhati High Court examined a writ petition filed by the assessee firm Rajkonwar And Sons And Anr Vs Union of India And 6 Ors, arising out of proceedings initiated under the Assam Goods and Service Tax Act, 2017 and the Central Goods and Service Tax Act, 2017.
The litigation started with a show cause notice dated 01.04.2022 issued under Section 74 of the Assam Goods and Service Tax Act, 2017 (AGST Act, 2017). The notice required the assessee to file a reply by 30.04.2022.
The assessee challenged this show cause notice directly before the High Court by way of writ petition, invoking the Court’s jurisdiction under Article 226 of the Constitution of India.
Initial Interim Protection by the Court
Upon admission of the writ petition, a Coordinate Bench of the Gauhati High Court, by an order dated 29.06.2022, directed the State GST authorities not to adopt any coercive measures against the assessee on the basis of the impugned show cause notice dated 01.04.2022.
This interim protection:
- was expressly related to the notice issued under the AGST Act, 2017, and
- continued to be extended from time to time during the pendency of the writ petition.
Notably, there was no injunction against the authorities acting under the Central Goods and Service Tax Act, 2017 (CGST Act, 2017).
Parallel Proceedings Under CGST and the Order-in-Original
Fresh Show Cause Notice under CGST Act
While the writ petition against the AGST notice was pending, the record showed that another show cause notice dated 23.09.2025 was issued by respondent No.3 under Section 74 of the CGST Act, 2017.
The crucial aspects were:
- This notice was issued by the Proper Officer under the CGST Act, 2017.
- There was no specific restraint order passed by the High Court preventing the CGST authorities from initiating or continuing proceedings under the CGST framework.
Assessee’s Participation in CGST Proceedings
The assessee did not ignore the CGST show cause notice. Instead, they:
- participated in the adjudication proceedings, and
- their participation was acknowledged in detail in the Order-in-Original dated 12.02.2026, especially in paragraph 1.10 of that order.
Final Order-in-Original under CGST and AGST
Respondent No.3 ultimately passed an Order-in-Original dated 12.02.2026, by which:
- A demand of Rs.1,36,96,200/- was confirmed as short-paid tax,
- Interest was levied under
Section 50of the CGST Act, 2017 and the AGST Act, 2017, and - A penalty equal to Rs.1,36,96,200/- was imposed under
Section 74(9)of the CGST Act, 2017 and AGST Act, 2017.
Thus, the adjudication proceedings reached finality at the adjudicating authority level, culminating in a complete Order-in-Original on tax, interest, and penalty.
Misconceived Challenge Through Interlocutory Application
Instead of Filing Statutory Appeal under Section 107
The CGST regime provides a comprehensive appellate mechanism under Section 107 of the CGST Act, 2017 to challenge an Order-in-Original passed by the Proper Officer. The natural and statutory remedy would have been to:
- file an appeal before the Appellate Authority within the prescribed time limit, and
- seek appropriate relief on facts and law in that appellate forum.
However, the assessee did not adopt this statutory route. Instead:
- They filed an interlocutory application, being IA(C) No.1709/2026, in the already pending writ petition, and
- Sought to contest the very Order-in-Original dated 12.02.2026 within the framework of the same writ proceedings.
Interim Protection Against the Order-in-Original
On this interlocutory application, a Coordinate Bench of the High Court, by order dated 22.06.2016 (as recorded in the judgment), issued notice and directed that no coercive steps be taken against the assessee in terms of the Order-in-Original dated 12.02.2026.
Thus, at that stage: