Case Reference (As Required)

• Case Title: Bedi and Bedi Associates v. Commissioner of CGST Delhi Audit-1 & Anr.

• Court: Delhi High Court

• Petition Number: W.P.(C) 15065/2023 & CM Appl. 60150/2023

• Category of Dispute: GST Exemption – Notification No. 12/2017; Validity of Corrigendum; Audit Observations; Section 74 Proceedings

• Date of Judgment: 21 November 2023

• Relevant Provisions:

  • CGST Act: Section 74

Facts of the Case (Paras 1–8)

The petitioner, a service provider, claimed exemption from GST on outward supplies made to a Polytechnic, invoking Notification No. 12/2017-CT (Rate) dated 28.06.2017 (Para 2). The Audit Department issued a letter dated 07.03.2023 seeking details of the exemption notification and outward supplies (Para 3). The petitioner submitted its reply on 09.03.2023 (Para 4).

Thereafter, Final Audit Observations (ADT-02) dated 07.06.2023 were issued (Para 5). The Monitoring Committee approved the findings that supplies to a Polytechnic do not qualify as supplies to an “educational institution” under the Notification, resulting in a proposed tax demand of ₹49,16,111 plus interest and penalty (Paras 5–6).

Subsequently, two corrigendums dated 25.08.2023 and 28.08.2023 were issued, revising the quantification (Para 7). A Show Cause Notice dated 11.09.2023 was issued under Section 74 proposing recovery of ₹1,79,56,485, alleging wrongful exemption claim (Para 7).

The petitioner approached the Court without responding to the SCN, alleging that the corrigendums were not approved by the Monitoring Committee (Paras 8–9).

Questions / Issues Before the Court (Paras 9–11)

The core legal issue was whether the corrigendums revising the quantum of GST demand were invalid for want of approval from the Monitoring Committee, thereby rendering the SCN and subsequent actions unsustainable.

Court’s Observations (Paras 10–13)

The Court noted that the foundation of the demand—the finding that exemption under Notification No. 12/2017 was incorrectly availed—was already approved by the Monitoring Committee (Para 10). The corrigendums merely corrected the quantification arising from computational adjustments, which ordinarily do not require separate or fresh approval (Para 10).

Moreover, the respondents submitted that the petitioner’s factual premise was incorrect as the corrigendums were, in fact, placed before and approved by the Monitoring Committee in its meeting dated 17.08.2023 (Para 12). The Court found no material to dispute this assertion (Para 13).

Thus, the entire petition rested on a fallacious factual assumption, and the impugned actions were not liable to be quashed (Paras 11–13).

Judgment / Verdict (Para 14)

The Court held that the petition was premised on an incorrect factual foundation. As the corrigendums were duly approved and only corrected computational errors, the petition lacked merit.

The writ petition was dismissed, and pending applications were disposed of.

Cases Referred – Summary Table

(Note: Judgment does not cite external case law; only internal references exist.)
Thus, No external judicial precedents were cited in this order.

Between Fine Lines — Practical Takeaways for Trade & Industry

Entities availing GST exemptions must ensure meticulous compliance with notification conditions, as audit-based objections can be escalated into Section 74 proceedings. Corrections in tax quantification through corrigendums do not invalidate the proceedings so long as the foundational audit findings are duly approved. Challenging an SCN without responding to it, especially on shaky factual grounds, is unlikely to succeed.