Case Summary
Case Title: GST writ petition dismissed as High Court held issues not raised before adjudicating authority cannot be agitated for the first time in writ proceedings
Court: Rajasthan High Court, Jodhpur
Petition No.: D.B. Civil Writ Petition No. 21754/2024
Petitioner: M/s Marudhar Food Products
Respondents: Assistant Commissioner, CGST Division-F, Bikaner & Ors.
Category of Dispute: Levy of Tax / Writ jurisdiction vs. statutory appeal
Date of Judgment: 20.01.2025
Relevant Sections: Article 226 of Constitution (writ jurisdiction), CGST Act provisions on levy and appeals
Facts (para 1–2)
The petitioner, M/s Marudhar Food Products, challenged an order passed by the GST authorities primarily on the ground that the levy was contrary to CBIC circulars dated 01.08.2023 and 11.10.2024, and that tax prior to 27.07.2023 was not leviable. It was argued that the adjudicating authority had ignored these circulars while confirming the demand. The respondents opposed the writ petition by pointing out that this plea was never raised in the reply to the show cause notice or during adjudication and was being introduced for the first time before the High Court.
Questions of Law (para 2)
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Whether the writ petition can be entertained when the petitioner had not raised the issue of applicability of circulars before the adjudicating authority?
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Whether levy of tax prior to 27.07.2023 could be disputed directly before the High Court without exhausting statutory remedies of appeal?
Observations (para 2–3)
The Court noted that while the petitioner relied on several Supreme Court judgments such as Commissioner of Customs v. Indian Oil Corporation (2004), Union of India v. Arviva Industries Ltd. (2014), Fatima Bibi Ahmed Patel v. State of Gujarat (2008), and CCE v. Merino Panel Product Ltd. (2023), the fundamental hurdle was procedural. The plea regarding circulars and levy was never urged before the adjudicating authority. Entertaining such a new ground at the writ stage would bypass the statutory mechanism and dilute the appellate framework under the GST Act. The High Court emphasized that writ jurisdiction is discretionary and not meant to substitute statutory appeal, especially when factual and legal issues were not tested at lower levels.
Judgment (para 3)
The Division Bench dismissed the writ petition holding that no case was made out to exercise writ jurisdiction under Article 226 since the issue was not raised at the adjudication stage. However, liberty was granted to the petitioner to avail the statutory remedy of appeal as per the provisions of the CGST Act.
Table of Cases Referred
| Case | Citation | Verdict / Principle |
|---|---|---|
| Commissioner of Customs, Calcutta & Ors. v. Indian Oil Corporation Ltd. | (2004) 3 SCC 488 | Held that circulars are binding on authorities and must be followed consistently. |
| Union of India v. Arviva Industries Ltd. | (2014) 3 SCC 159 | Clarified on prospective vs. retrospective application of circulars and exemption benefits. |
| Fatima Bibi Ahmed Patel v. State of Gujarat | (2008) 6 SCC 789 | Principle that new issues cannot ordinarily be raised for the first time at appellate or writ stage without factual foundation. |
| CCE & ST, Rohtak v. Merino Panel Product Ltd. | (2023) 2 SCC 597 | Reiterated that CBIC circulars have binding effect on department unless withdrawn. |
Between Fine Lines
For businesses, this judgment underscores that all grounds, including reliance on circulars, must be taken at the adjudication stage itself. Courts are reluctant to entertain fresh arguments at the writ stage, preferring parties to first exhaust the appellate remedy under GST law. This reinforces the importance of careful drafting of replies to SCNs and active defense during adjudication.
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