Facts of the Case

The petitioner, Bajaj Auto Limited, challenged an adjudication order dated 01.12.2025 passed by the third respondent under Section 73(9) of the Uttarakhand GST Act/CGST Act read with Rule 122, raising a differential tax demand at 10% on spare parts manufactured by the petitioner during Financial Year 2021-22. The dispute arose from an audit conducted under Section 65 of the CGST Act, following which a show-cause notice dated 26.09.2025 was issued proposing that the spare parts -- meant for a particular vehicle model -- fell under HSN Code 8714 (parts and accessories of vehicles of Headings 8711 to 8713), attracting 28% tax, whereas the petitioner had paid tax at 18%. The petitioner replied on 04.11.2025 and was granted a personal hearing before the adjudication order was passed. Aggrieved, the petitioner approached the Uttarakhand High Court under Article 226, primarily contending that its reply had not been properly considered.

Issues Involved

  1. Whether the writ court should examine, on merits, the correctness of an HSN-classification-based GST demand where an efficacious statutory appellate remedy under Section 107 of the CGST Act is available.
  2. Whether the requirement of pre-deposit for filing such a statutory appeal is a valid ground to bypass that remedy and invoke writ jurisdiction directly.

Petitioner's Arguments

  • Contended that its detailed reply to the show-cause notice was not properly considered by the Adjudicating Officer, and that the matter ought to be remitted back for fresh consideration.
  • Relied on Whirlpool Corporation vs. Registrar of Trade Marks and a line of High Court decisions (including Avandtha Holdings, OLA Fleet Technologies, Holy Land Marketing, Indian Highways Management Company, Rays Power Infrastructure and Ideal Datacom Network) to argue that writ jurisdiction could be exercised despite the availability of an appellate remedy.
  • Separately submitted that since availing the statutory appeal would require making a pre-deposit, the writ petition ought to be entertained on that ground.
  • Additionally pointed to a favourable order passed by an Adjudicating Authority in Maharashtra on similar facts.

Respondent's Arguments

  • Appearing through the Brief Holder for the State, the respondents proceeded on the basis that an efficacious statutory appellate remedy under Section 107 of the CGST Act was available to the petitioner and had not been shown to be inadequate.

Court Order / Findings

  • On perusing the impugned order, found that the Adjudicating Authority had specifically examined the HSN classification issue and returned a clear finding that the spare parts fell under HSN Code 8714, attracting 28% tax as against the 18% paid, and had raised the differential demand on that basis -- i.e., the order was reasoned and not a mechanical rejection of the reply.
  • Noted that it was undisputed that an appeal under Section 107 of the Act was available against the impugned order.
  • Held that the statutory requirement of making a pre-deposit to avail the appellate remedy cannot itself be a ground to permit the petitioner to bypass that remedy.
  • Observed that the petitioner's additional submission regarding a favourable Maharashtra order could be pressed before the appellate authority if an appeal is filed.
  • Declined to examine the impugned order on merits and disposed of the writ petition with liberty to avail the statutory appellate remedy, clarifying that no observation made would come in the way of the petitioner, and that all pleas and contentions shall be considered and decided on merits by the appellate authority.

Important Clarification

  • The requirement of a mandatory pre-deposit for filing a GST appeal under Section 107 of the CGST Act cannot, by itself, be treated as a ground to bypass that statutory remedy and invoke writ jurisdiction directly.
  • This is particularly so where the impugned adjudication order itself reflects specific reasoning on the disputed issue -- such as an HSN classification dispute -- rather than a mechanical or unreasoned disposal of the assessee's reply; in such cases, the writ court will relegate the assessee to the appellate forum, keeping all contentions open for decision on merits.

Sections Involved

  • Section 73, CGST Act, 2017 -- determination of tax not involving fraud or wilful misstatement, under which the adjudication order raising the differential demand was passed.
  • Section 65, CGST Act, 2017 -- audit by tax authorities, pursuant to which the show-cause notice originated.
  • Section 107, CGST Act, 2017 -- appeal to the appellate authority, including the mandatory pre-deposit that the petitioner sought to avoid.

Decision – In Favour of

Procedurally in favour of the Department: the writ petition was disposed of without any interference on merits, and the petitioner was relegated to the statutory appellate remedy under Section 107, with all contentions on classification, interest and penalty left open for the appellate authority to decide.

Case Details

Court: High Court of Uttarakhand at Nainital
Case No.: Writ Petition (M/B) No.130 of 2026
Neutral Citation: 2026:UHC:1961-DB
Coram: Hon'ble the Chief Justice Mr. Manoj Kumar Gupta and Hon'ble Justice Mr. Subhash Upadhyay
Date of Order: 20.03.2026

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