Gujarat High Court
M/S Unicure Remedies Private Limited vs Union Of India on 26 June, 2025
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/SCA/6964/2025 ORDER DATED: 26/06/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 6964 of 2025
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M/S UNICURE REMEDIES PRIVATE LIMITED
Versus
UNION OF INDIA & ANR.
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Appearance:
ANANDODAYA S MISHRA(8038) for the Petitioner(s) No. 1
DEEPAK N KHANCHANDANI(7781) for the Respondent(s) No. 1,2
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
Date : 26/06/2025
ORAL ORDER
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) 1 Heard learned advocate Mr.Anandodaya Mishra, learned counsel for the petitoner and Mr.Deepak Khanchandani, learned counsel for the respondent.
2 By this petition under Article 227 of the Constitution of India, the petitioner has challenged the Order-in-Original dated 03.02.2025 passed by the Adjudicating Authority on the ground that it is without jurisdiction and authority of law and against Page 1 of 19 Uploaded by BIMAL B CHAKRAVARTY(HC01089) on Thu Jul 10 2025 Downloaded on : Fri Jul 11 22:17:05 IST 2025 NEUTRAL CITATION C/SCA/6964/2025 ORDER DATED: 26/06/2025 undefined the principles of natural justice. 3 The brief facts of the case are as under:
3.1 The petitioner is engaged in manufacturing of the pharmaceutical products falling under Chapter Heading 30043919 and 30049059.
3.2 The Assistant Commissioner of the C.G.S.T issued "notice for conducting audit" dated 23.08.2023, whereby, the petitioner was asked to furnish Purchase Register along with invoices for the entire audit period from 01.07.2017 to 31.03.2022.
3.3 In response to the said notice, the petitioner, by E-mail dated 19.10.2023 submitted the documents. However, the Purchase Registers submitted by the petitioner was without invoice number of the supplier but, Page 2 of 19 Uploaded by BIMAL B CHAKRAVARTY(HC01089) on Thu Jul 10 2025 Downloaded on : Fri Jul 11 22:17:05 IST 2025 NEUTRAL CITATION C/SCA/6964/2025 ORDER DATED: 26/06/2025 undefined voucher numbers were reflected in a running format.
3.4 Thereafter, the petitioner was informed by E-mail dated 09.11.2023 about initiation of the audit and also was requested to provide reconciliation and clarification including the Purchase Register for the entire audit period.
It is the case of the respondent that repeated request for providing properly formatted Purchase Register and year-wise invoices were made but the same were ignored. 3.5 By a letter dated 19.02.2024, again the petitioner was requested to provide invoice wise ITC details. The petitioner submitted ITC Register for only two quarters on 21.02.2024 but not in the prescribed format and without any further submissions for subsequent period. Page 3 of 19 Uploaded by BIMAL B CHAKRAVARTY(HC01089) on Thu Jul 10 2025 Downloaded on : Fri Jul 11 22:17:05 IST 2025
NEUTRAL CITATION C/SCA/6964/2025 ORDER DATED: 26/06/2025 undefined 3.6 The respondent, thereafter, issued the notice in Form GST DRC-01A on 18.07.2024 under Sec.74(5) of the CGST Act, 2017, quantifying the amount of tax/interest/penalty payable by the petitioner under Sec.74(1) read with section 50 and section 122 of the CGST Act, read with section 20 of the IGST Act along with the grounds for such quantification, which reads as under:-
Act Period/Details Tax Interest Penalty CGST July 2017 to (IGST-Rs.9,49,99,948/- As applicable As Act, March 2022/ As CGST-Rs.10,94,65,516/- applicable 2017 per Annexure A SGST-R.10,94,65,512/-
(Point-1) Total-
Rs.31,39,30,976/-
CGST July 2017 to (IGST- Rs.26,79,943/- As applicable As
Act, March 2022 (As CGST- Rs.88,62,550/- applicable
2017 per Annexure A SGST-Rs.86,62,550/-)
(Point-2)
CGST July 2017 to CGST-Rs.5,54,133/- As applicable As
Act, March 2022 (As SGST-Rs.5,54,133/- applicable
2017 per Annexure Total-Rs.11,08,266/-
A(Point-3)
CGST July 2017 to Interest IGST - Rs.105/- - -
Act , March 2022 (As Interest CGST-Rs.531/-
2017 per Annexure
A(Point-4) Interest SGST- Rs.531/-
Total Interest-Rs. 1167/-
CGST July 2017 to Late fee-Rs. 5000/- - -
Act, March 2022 (As
2017 per Annexure
A(Point-5)
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NEUTRAL CITATION
C/SCA/6964/2025 ORDER DATED: 26/06/2025
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CGST July 2017 to - - Penalty-
Act, March 2022 (As Rs.50,000/
2017 per Annexure - (CGST-
A(Point-6) 25,000/-
SGST-
Rs.25,000/
-)
3.7 The petitioner submitted the reply to
notice in Form GST DRC 01A on 01.08.2024. The respondent also uploaded the Audit Report dated 01.08.2024 on the basis of the examination of accounts and records of the petitioner for the period from July, 2017 to March,2022.
3.8 The respondent, thereafter, issued the show-cause notice dated 02.08.2024 under Sec.74(1) of the GST Act read with Sec.20 of the IGST Act in Form DRC-01 based upon audit objections raised in the Audit Report. The petitioner, by letter dated 06.08.2024, addressed to the Principal Commissioner (Audit), made a grievance against the issuance Page 5 of 19 Uploaded by BIMAL B CHAKRAVARTY(HC01089) on Thu Jul 10 2025 Downloaded on : Fri Jul 11 22:17:05 IST 2025 NEUTRAL CITATION C/SCA/6964/2025 ORDER DATED: 26/06/2025 undefined of the show-cause notice dated 02.08.2024.
Thereafter, a corrigendum was issued to the show-cause notice dated 02.08.2024 by substituting para 6.1,6.2,6.3 para 14 and exh.8 to the show-cause notice. Further corrigendum dated 09.08.2024 was issued on 14.08.2024 to correct the Final Audit Report No. 12/2024-25 dated 01.08.2024. 3.9 The petitioner, thereafter, submitted reply dated 21.09.2024 in Form DRC-06 to the show-cause notice on merits. The respondent, thereafter, passed Order-in-Original dated 03.02.2025 partially confirming the recovery of tax amount, penalty and interest from the petitioner. The petitioner, being aggrieved, has preferred this petition challenging the impugned Order-in-Original. 4 Learned advocate Mr.Anandodaya Mishra Page 6 of 19 Uploaded by BIMAL B CHAKRAVARTY(HC01089) on Thu Jul 10 2025 Downloaded on : Fri Jul 11 22:17:05 IST 2025 NEUTRAL CITATION C/SCA/6964/2025 ORDER DATED: 26/06/2025 undefined appearing for the petitioner submitted that the impugned order is passed in flagrant breach of principles of natural justice as the Audit Report dated 01.08.2024 and the show- cause notice dated 02.08.2024 were uploaded only on 03.08.2024.
4.1 It was further submitted that in the impugned Order-in-Original, the adjudicating authority could not have confirmed the demand once it was contrary to what is stated in the show-cause notice. It was submitted that in the show-cause notice, the adjudicating authority proposed disallowance of ITC amounting to Rs.31,39,30,976/- which was reduced to 79,56,126/- in view of the provision of Sec.16(2)(c) of the CGST Act, 2017.
4.2 It was pointed out by learned advocate Page 7 of 19 Uploaded by BIMAL B CHAKRAVARTY(HC01089) on Thu Jul 10 2025 Downloaded on : Fri Jul 11 22:17:05 IST 2025 NEUTRAL CITATION C/SCA/6964/2025 ORDER DATED: 26/06/2025 undefined Mr.Anandodaya Mishra that thereafter the adjudicating authority could not have referred to the contravention of Secs.16 and 17 of the CGST Act, 2017, involving various issues and make an addition of more than 20 crores. It was therefore submitted that the addition of above Rs.79,56,126/- is contrary to what is alleged in the show-cause notice. It was further submitted that the adjudicating authority has referred to the detailed verification submitted by the Jurisdictional Range Officer (JRO) vide mail dated 09.01.2025 in para 2.16 of the impugned Order-in- Original. However, no such report was provided to the petitioner and the same was referred to in the impugned Order-in-Original. 4.3 It was therefore submitted that the petitioner is deprived of the contents of the report submitted by the JRO on the basis of Page 8 of 19 Uploaded by BIMAL B CHAKRAVARTY(HC01089) on Thu Jul 10 2025 Downloaded on : Fri Jul 11 22:17:05 IST 2025 NEUTRAL CITATION C/SCA/6964/2025 ORDER DATED: 26/06/2025 undefined the cross verification of GST 2A align with the Purchase Register submitted by the petitioner. It was, therefore, submitted that the impugned order is liable to be quashed and set aside.
4.4 It was further submitted that the adjudicating authority by invoking section 16(2)(c) has disallowed the ITC without making any further verification with the payment of tax by the supplier as the petitioner has no mechanism to verify such facts. It was further submitted that the respondent authorities have not even followed the provision of sec.65(6) of the GST Act, and therefore, it is a malice in law.
4.5 It was further submitted that the notice issued in Form GST DRC-01A is premature as the Audit Report was never provided to the Page 9 of 19 Uploaded by BIMAL B CHAKRAVARTY(HC01089) on Thu Jul 10 2025 Downloaded on : Fri Jul 11 22:17:05 IST 2025 NEUTRAL CITATION C/SCA/6964/2025 ORDER DATED: 26/06/2025 undefined petitioner prior to issuance of such notice. 5 Having heard the learned advocate for the petitioner and on perusal of the impugned notices and the Order-in-Original as well as the replies filed by the petitioner, it appears that the petitioner has an alternative efficacious remedy to raise all the contentions which are raised before us as well as in the memo of the petition before the Appellate Authority who is empowered to look into the same and pass an appropriate order in accordance with law.
5.1 Section 107 of the GST Act, reads as under:
"Section 107. Appeals to Appellate Authority.-
(1) Any person aggrieved by any decision or order passed under this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act by an adjudicating authority may appeal to such Appellate Authority as may be prescribed within three months from the Page 10 of 19 Uploaded by BIMAL B CHAKRAVARTY(HC01089) on Thu Jul 10 2025 Downloaded on : Fri Jul 11 22:17:05 IST 2025 NEUTRAL CITATION C/SCA/6964/2025 ORDER DATED: 26/06/2025 undefined date on which the said decision or order is communicated to such person. (2) The Commissioner may, on his own motion, or upon request from the Commissioner of State tax or the Commissioner of Union territory tax, call for and examine the record of any proceedings in which an adjudicating authority has passed any decision or order under this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, for the purpose of satisfying himself as to the legality or propriety of the said decision or order and may, by order, direct any officer subordinate to him to apply to the Appellate Authority within six months from the date of communication of the said decision or order for the determination of such points arising out of the said decision or order as may be specified by the Commissioner in his order. (3) Where, in pursuance of an order under sub-section (2), the authorised officer makes an application to the Appellate Authority, such application shall be dealt with by the Appellate Authority as if it were an appeal made against the decision or order of the adjudicating authority and such authorised officer were an appellant and the provisions of this Act relating to appeals shall apply to such application. (4) The Appellate Authority may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of three months or six months, as the case Page 11 of 19 Uploaded by BIMAL B CHAKRAVARTY(HC01089) on Thu Jul 10 2025 Downloaded on : Fri Jul 11 22:17:05 IST 2025 NEUTRAL CITATION C/SCA/6964/2025 ORDER DATED: 26/06/2025 undefined may be, allow it to be presented within a further period of one month.
(5) Every appeal under this section shall be in such form and shall be verified in such manner as may be prescribed. (6) No appeal shall be filed under sub-
section (1), unless the appellant has paid-
(a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and
(b) a sum equal to ten per cent. of the remaining amount of tax in dispute arising from the said order, 1[subject to a maximum of 3[twenty] crore rupees], in relation to which the appeal has been filed.
2[Provided that no appeal shall be filed against an order under sub-section (3) of section 129, unless a sum equal to twenty-five per cent. of the penalty has been paid by the appellant.] (7) Where the appellant has paid the amount under sub-section (6), the recovery proceedings for the balance amount shall be deemed to be stayed.
(8) The Appellate Authority shall give an opportunity to the appellant of being heard.
(9) The Appellate Authority may, if sufficient cause is shown at any stage of hearing of an appeal, grant time to the parties or any of them and adjourn the Page 12 of 19 Uploaded by BIMAL B CHAKRAVARTY(HC01089) on Thu Jul 10 2025 Downloaded on : Fri Jul 11 22:17:05 IST 2025 NEUTRAL CITATION C/SCA/6964/2025 ORDER DATED: 26/06/2025 undefined hearing of the appeal for reasons to be recorded in writing:
Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal. (10) The Appellate Authority may, at the time of hearing of an appeal, allow an appellant to add any ground of appeal not specified in the grounds of appeal, if it is satisfied that the omission of that ground from the grounds of appeal was not wilful or unreasonable.
(11) The Appellate Authority shall, after making such further inquiry as may be necessary, pass such order, as it thinks just and proper, confirming, modifying or annulling the decision or order appealed against but shall not refer the case back to the adjudicating authority that passed the said decision or order:
Provided that an order enhancing any fee or penalty or fine in lieu of confiscation or confiscating goods of greater value or reducing the amount of refund or input tax credit shall not be passed unless the appellant has been given a reasonable opportunity of showing cause against the proposed order:
Provided further that where the Appellate Authority is of the opinion that any tax has not been paid or short-paid or erroneously refunded, or where input tax credit has been wrongly availed or utilised, no order requiring the appellant to pay such tax or input tax credit shall be passed unless the appellant is given notice to show cause against the proposed Page 13 of 19 Uploaded by BIMAL B CHAKRAVARTY(HC01089) on Thu Jul 10 2025 Downloaded on : Fri Jul 11 22:17:05 IST 2025 NEUTRAL CITATION C/SCA/6964/2025 ORDER DATED: 26/06/2025 undefined order and the order is passed within the time limit specified under section 73 or section 74 4[or section 74A].
(12) The order of the Appellate Authority disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reasons for such decision. (13) The Appellate Authority shall, where it is possible to do so, hear and decide every appeal within a period of one year from the date on which it is filed:
Provided that where the issuance of order is stayed by an order of a court or Tribunal, the period of such stay shall be excluded in computing the period of one year.
(14) On disposal of the appeal, the Appellate Authority shall communicate the order passed by it to the appellant, respondent and to the adjudicating authority.
(15) A copy of the order passed by the Appellate Authority shall also be sent to the jurisdictional Commissioner or the authority designated by him in this behalf and the jurisdictional Commissioner of State tax or Commissioner of Union Territory Tax or an authority designated by him in this behalf.
(16) Every order passed under this section shall, subject to the provisions of section 108 or section 113 or section 117 or section 118 be final and binding on the parties."Page 14 of 19 Uploaded by BIMAL B CHAKRAVARTY(HC01089) on Thu Jul 10 2025 Downloaded on : Fri Jul 11 22:17:05 IST 2025
NEUTRAL CITATION C/SCA/6964/2025 ORDER DATED: 26/06/2025 undefined 5.2 The Hon'ble Apex Court in the case of The Assisstant Commissioner of State Tax & Ors. Vs. M/s. Commercial Steel Limited., reported in 2021 (9) TMI 480 SC, has held that the writ petition can be entertained only in exceptional circumstances i.e. where there is a breach of fundamental rights or violation of principles of natural justice or access of jurisdiction or challenge to the vires to the statute or delegated legislation. Merely pleading that there is a violation of principles of natural justice or challenge of vires to the statue in the pleading cannot give jurisdiction to entertain the writ petition under Article 226 of the Constitution of India.
5.3 In the facts of the case, though the petitioner has tried to raise that there is a violation of principles of natural justice, we Page 15 of 19 Uploaded by BIMAL B CHAKRAVARTY(HC01089) on Thu Jul 10 2025 Downloaded on : Fri Jul 11 22:17:05 IST 2025 NEUTRAL CITATION C/SCA/6964/2025 ORDER DATED: 26/06/2025 undefined are of the opinion that such alleged violation of principles of natural justice is not forthcoming inasmuch as, the petitioner has tried to raise technical pleas with regard to not providing of Audit Report or relying upon the provisions of Sec.65(6) of the GST Act, as well as referring to the show-cause notice or referring to the Order-in-Original in contradiction to the show-cause notice, as all such contentions can be raised before the Appellate Authority, and therefore, it is not appropriate for this Court to entertain the writ petition challenging the Order-in- Original at this stage.
5.4 The assessment of facts and the appreciation of the material on record will have to be carried out by the Appellate Authority and in the facts of the case, we relegate the petitioner to pursue the Page 16 of 19 Uploaded by BIMAL B CHAKRAVARTY(HC01089) on Thu Jul 10 2025 Downloaded on : Fri Jul 11 22:17:05 IST 2025 NEUTRAL CITATION C/SCA/6964/2025 ORDER DATED: 26/06/2025 undefined alternative statutory remedy under Sec.107 of the GST Act, and therefore, refrain from making any observation on merits of the case of the petitioner.
5.5 The Hon'ble Apex Court in the case of M/s.Commercial Steel (supra), while considering the challenge to the order passed by the High Court entertaining the writ petition under Article 226 of the Constitution of India has observed as under:
"(11) The Appellate Authority shall, after making such further inquiry as may be necessary pass such order as it thinks just and proper, confirming, modifying or annulling the decision or order appealed against but shall not refer the case back to the adjudicating authority that passed the said decision or order Provided that an order enhancing any fee or penalty or fine in lieu of confiscation or confiscating goods of greater value or reducing the amount of refund or input tax credit shall not be passed unless the appellant has been given a reasonable opportunity of showing cause against the proposed order Page 17 of 19 Uploaded by BIMAL B CHAKRAVARTY(HC01089) on Thu Jul 10 2025 Downloaded on : Fri Jul 11 22:17:05 IST 2025 NEUTRAL CITATION C/SCA/6964/2025 ORDER DATED: 26/06/2025 undefined Provided further that where the Appellate Authority is of the opinion that any tax has not been paid or short-paid or erroneously refunded, or where input tax credit has been wrongly availed or utilised, no order requiring the appellant to pay such tax or input tax credit shall be passed unless the appellant is given notice to show cause against the proposed order and the order is passed within the time limit specified under Section 73 or Section 74 (12) The order of the Appellate Authority disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reasons for such decision.
(13) The Appellate Authority shall, where it is possible to do so, hear and decide every appeal within a period of one year from the date on which it is filed Provided that where the issuance of order is stayed by an order of a court or Tribunal the period of such stay shall be excluded in computing the period of one year."
6 In view of the foregoing reasons, we decline to entertain this writ petition with a liberty to the petitioner to avail an Page 18 of 19 Uploaded by BIMAL B CHAKRAVARTY(HC01089) on Thu Jul 10 2025 Downloaded on : Fri Jul 11 22:17:05 IST 2025 NEUTRAL CITATION C/SCA/6964/2025 ORDER DATED: 26/06/2025 undefined alternative efficacious remedy in accordance with law.
It is clarified that we have not observed anything on merits and it would be open for the petitioner to raise all the contentions before the Appellate Authority so as to enable the Appellate Authority to consider the same in accordance with law.
7 The petition is disposed of, accordingly.
(BHARGAV D. KARIA, J) (PRANAV TRIVEDI,J) BIMAL Page 19 of 19 Uploaded by BIMAL B CHAKRAVARTY(HC01089) on Thu Jul 10 2025 Downloaded on : Fri Jul 11 22:17:05 IST 2025