Raipur GSTAT Remands Three GST Appeals Where First Appellate Authority Reproduced Identical Orders Without Addressing Grounds or Judicial Citations

Background and Context

The Raipur Bench of the Goods and Services Tax Appellate Tribunal, in a common order disposing of three connected second appeals, has set aside both the first appellate orders and the underlying original adjudication orders, remanding all matters for fresh consideration from the stage of original adjudication. The appeals bore numbers APL/05/RPR/2026, APL/20/RPR/2026 and APL/31/RPR/2026, and the common order was pronounced on 24 September 2026.

The three appellants — M/s Cheema Bricks & Traders, M/s Cheema Trading Company and M/s Cheema Local Carrier & Construction — are connected entities whose business premises were subjected to search proceedings conducted on 10/11 February 2021 under Section 67 of the GST Act. The searches resulted in seizure of books of accounts, registers, invoice books and allied documents. On the basis of the investigation material collected, the Department initiated demand proceedings under Section 74 of the GST Act, issuing FORM GST DRC-01A in February 2023 and portal-generated show cause notices in FORM GST DRC-01 dated 13 April 2023.

The Demands Under Challenge

The original adjudicating authorities passed Orders-in-Original under Section 74, quantifying demands comprising tax, interest and penalty. The primary evidentiary material differed across the three proceedings:

• In the case of M/s Cheema Bricks & Traders (APL/05/RPR/2026): the demand was founded on site-wise registers seized during the search.
• In the case of M/s Cheema Trading Company (APL/20/RPR/2026): the demand rested on seized invoice books and related material.
• In the case of M/s Cheema Local Carrier & Construction (APL/31/RPR/2026): the demand pertained to alleged independent taxable transportation/GTA activity based on material recovered during investigation.

The aggregate demands, as determined in the Orders-in-Original, were as follows:

In all three cases, the demand was split equally between CGST and SGST with no IGST or cess component.

Each appellant preferred a first appeal, being First Appeal Nos. 452/GST/2023, 451/GST/2023 and 450/GST/2023 respectively. All three were dismissed by the Joint Commissioner (Appeal), State Tax, Raipur, vide Orders-in-Appeal dated 06 May 2024, prompting the present second appeals before the Tribunal.

Grounds Raised by the Appellants

The appellants assailed the impugned orders on multiple factual and legal grounds. The following seven specific grounds were common to the appeals:

1. Adjudication conducted in violation of principles of natural justice
2. Proceedings void ab initio — non-issuance of a proper show cause notice under Section 74 of the GST Act
3. Demand resting on mere assumptions and conjectures, rendering it unsustainable
4. Allegations of clandestine removal being unsustainable in the absence of any investigation at the buyer's end
5. Tax liability having already been discharged on transportation charges
6. Absence of suppression of facts — penalty under Section 74 not imposable
7. Interest and penalty not chargeable

On the procedural side, the appellants contended that:

• The portal-generated show cause notices dated 13 April 2023 were issued without any detailed annexure specifying the allegations or the evidentiary foundation of the proposed demands.
• The relied-upon documents were not duly identified or made available to enable an effective reply.
• The Orders-in-Original were passed without affording an effective opportunity of personal hearing as mandated under Section 75(4) of the GST Act.
• The detailed grounds accompanying FORM GST DRC-01A could not, on their own, be treated as the detailed contents of the subsequently issued show cause notices.

On the merits, appeal-specific disputes were raised:

• M/s Cheema Bricks & Traders challenged the treatment of entries in the seized site-wise registers as unaccounted taxable supplies, including the extrapolation made therefrom, and specifically pleaded that supply of bricks along with transportation constituted a composite supply, with transportation charges already forming part of the taxable consideration on which tax had been discharged.
• M/s Cheema Trading Company disputed the reliance on seized invoice books and the consequential estimation of alleged unaccounted supplies.
• M/s Cheema Local Carrier & Construction disputed the very existence of an independent taxable transportation/GTA activity and the material used to establish the same.

The appellants also challenged invocation of Section 74, contending that the statutory prerequisites of fraud, wilful misstatement or suppression of facts with intent to evade payment of tax had not been established. In support of all these grounds, the appellants placed reliance on approximately 70 judicial citations.

Department's Position

The respondent-Department defended the impugned orders and refuted the allegations of natural justice violations. Its principal contentions were: