Facts of the Case

The petitioner, M/s. D.R. Patnaik, challenged an Order-in-Original dated 20.02.2025 and Summary Order dated 24.02.2025 passed by the Additional Commissioner, GST & Central Excise Commissionerate, Rourkela, under Section 73 of the CGST/OGST Act, raising a demand of Rs.10,16,95,448/- for FY 2020-21 with penalty of Rs.1,01,69,545/-, on the allegation of excess Input Tax Credit availed. Though returns in GSTR-3B and GSTR-2A had been furnished, the petitioner claimed to have submitted a detailed reconciliation statement with supporting documents via Form GST DRC-06 on 20.12.2024, explaining the differences between ITC availed in GSTR-3B and ITC available in GSTR-2A/GSTR-8A, but the adjudicating authority proceeded on the footing that no defence reply had been filed.

Issues Involved

  1. Whether the Order-in-Original suffered from a violation of natural justice for having ignored the petitioner's detailed reply and supporting documents filed in Form GST DRC-06.
  2. Whether the writ petition was maintainable despite the availability of an alternative statutory appellate remedy.

Petitioner's Arguments

  • A detailed reply with reconciliation statement and supporting documents had in fact been furnished on 20.12.2024 via Form GST DRC-06, well before the Order-in-Original dated 20.02.2025, yet paragraph 4 of the impugned order wrongly recorded that no defence reply had been submitted, and the reply was never considered.
  • Non-consideration of the reply amounted to flagrant violation of principles of natural justice and arbitrary exercise of power, warranting interference, relying on the Delhi High Court's decision in Samsung India Electronics Pvt Ltd v. Union of India (W.P.(C) No.7351 of 2024), where a similar order was set aside and remanded on identical facts.

Respondent's Arguments

  • The Senior Standing Counsel for CGST vehemently opposed the maintainability of the writ petition, contending that the statutory alternative remedy under the GST Act excluded the Court's jurisdiction to interfere with the adjudication order, and that the appellate authority was competent to deal with both facts and law.

Court Order / Findings

  • The Court examined paragraph 4 of the Order-in-Original, which recorded that “the Noticee did not submit their defense reply till date,” and found this factually incorrect since the reply dated 20.12.2024 in Form GST DRC-06, along with documents, had been uploaded well before the order was passed on 20.02.2025 — a fact the Department's Senior Standing Counsel could not and did not dispute.
  • The Court held there was glaring non-adherence to principles of natural justice, an error apparent on the face of the record, and set aside the Order-in-Original dated 20.02.2025 and the Summary Order dated 24.02.2025, remitting the matter for fresh adjudication.
  • The petitioner was directed to appear before the adjudicating authority on a fixed date with a certified copy of the order, and the authority was directed, after affording personal hearing and examining the reply and enclosed documents, to pass a fresh adjudication order; the Court clarified it had expressed no opinion on the merits and that the authority could proceed with the Section 73 proceeding in accordance with law.

Important Clarification

  • An adjudicating authority's factually incorrect recital that no reply was filed to a show cause notice — when a detailed reconciliation reply with supporting documents was in fact uploaded in Form GST DRC-06 well before the order — constitutes an error apparent on the face of the record and a glaring violation of natural justice, justifying interference in writ jurisdiction notwithstanding the availability of a statutory appeal.
  • Courts will follow the approach in Samsung India Electronics of setting aside such orders and remitting for fresh adjudication with a direction to examine the reply and documents on record, rather than relegating the assessee to appeal a demonstrably unconsidered order.

Sections Involved

  • Section 73 of the Central Goods and Services Tax Act, 2017 / Odisha Goods and Services Tax Act, 2017 — determination of tax not paid or short paid, or ITC wrongly availed, for reasons other than fraud.
  • Form GST DRC-06 — the prescribed reply to a show cause notice, including supporting documents, held to have been ignored by the adjudicating authority.

Decision – In Favour of

Allowed in favour of the Assessee; the Order-in-Original and Summary Order were set aside for violation of natural justice, and the matter was remitted for fresh adjudication after considering the petitioner's reply and documents.

Case Details

Court: Orissa High Court, Cuttack
Case No.: W.P.(C) No.14904 of 2025
Coram: Hon'ble Mr. Justice Biraja Prasanna Satapathy and Hon'ble Mr. Justice Murahari Sri Raman
Date of Order: 4th June, 2025

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