Delhi High Court Relegates GST Assessee To Section 107 Appeal, Leaves Section 74 And Vodafone Contentions Open

The Case

M/S TRANSCORP INTERNATIONAL LIMITED Vs ADDITIONAL COMMISSIONER CGST & ANR.
Case No.: W.P.(C)/5893/2025
Decided on: 09/14/2026
CNR: DLHC010270372025 ·
High Court of Delhi

The Legal Issue

The Court was asked to exercise its jurisdiction under Article 226 of the Constitution to examine the Petitioner's challenge to the Order-in-Original dated 24.01.2025, FORM GST DRC-07 dated 29.01.2025 and the rectification order in FORM GST DRC-08 dated 03.02.2025, when the Petitioner admittedly had a statutory remedy of appeal under Section 107 of the CGST Act. The Court considered whether it should examine the merits of the individual demands or relegate the Petitioner to the statutory Appellate Authority.

Facts of the Case

The Petitioner, M/s Transcorp International Limited, assailed the Order-in-Original dated 24.01.2025, FORM GST DRC-07 dated 29.01.2025 and the rectification order in FORM GST DRC-08 dated 03.02.2025. The Petitioner admittedly had a statutory remedy of Appeal against the Order-in-Original under Section 107 of the CGST Act, and the rectification dated 03.02.2025 corrected the penalty reflected in FORM GST DRC-07 while the substantive findings in the Order-in-Original remained unaltered. The Petitioner relied upon Commissioner of Service Tax III, Mumbai v. Vodafone India Ltd., decided on 06.05.2025, and G.R. Infra Projects Limited Ratlam v. State of Madhya Pradesh, decided on 19.08.2026. In Vodafone India Ltd. (supra), the batch before the Supreme Court included Civil Appeal No.10885/2016 preferred by the Revenue against the Petitioner herein, concerning Money Transfer and Related Service rendered by the Petitioner during July, 2003 to September, 2007, and the Supreme Court dismissed the Appeals preferred by the Revenue. The present case pertains to the subsequent period under the GST regime and requires application of Sections 2(6), 2(13) and 13 of the Integrated Goods and Services Tax Act, 2017. The SCN dated 01.08.2024 contains a separate part setting out the grounds on which Section 74 has been invoked, alleging that material facts were not disclosed in the statutory returns, that discrepancies were detected during audit and that the alleged non-disclosures were willful and intentional.

Summary of the Decision

The Court held that it was not inclined to examine the merits of the individual demands in exercise of jurisdiction under Article 226 of the Constitution. The Court observed that the Order-in-Original deals with six separate issues, including availment of input tax credit, reconciliation between GSTR-1 and GSTR-3B, credit pertaining to suppliers who allegedly failed to file GSTR-3B, reversal of common credit, supplies claimed as export of services and corporate guarantees. The Court noted that the demand relating to export of services itself concerns three distinct streams, namely, Western Union, Cash-to-Master and VISA Worldwide, and examination of these issues would require consideration of the relevant agreements, returns, invoices, FIRCs and other documents placed on record. The Court therefore found the statutory Appellate Authority to be the appropriate forum to undertake such examination. The Court left all contentions of the parties open, including the effect of Vodafone India Ltd. (supra) upon the Western Union transactions, the Petitioner's challenge to the invocation of Section 74 in light of G.R. Infra Projects Limited Ratlam (supra), the consequential plea of limitation, the applicability of Section 75(2) of the CGST Act, if attracted, and the contentions concerning the remaining heads of demand. The Court granted liberty to the Petitioner to institute an Appeal under Section 107 of the CGST Act within four weeks from today, and directed that if such Appeal is filed within the aforesaid period, the same shall be entertained and decided on merits and shall not be rejected on the ground of limitation. The Court further directed that no coercive steps pursuant to the impugned Order-in-Original shall be taken for a period of four weeks from today, and thereafter the parties shall be governed by the orders passed by the Appellate Authority. The Writ Petition, along with the pending application, was disposed of in the aforesaid terms.

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