The Hon’ble Supreme Court of India in the case of MHJ Metaltechs Pvt. Ltd. v. Central Goods and Services Tax, Delhi [SLP Civil Diary No. 33710/2025, order dated September 08, 2025] held that the discretionary power under Article 136 to grant Special Leave Petition is not to be exercised when statutory appellate remedies are available, and the limitation on adjournments under Section 75(5) of the CGST Act is mandatory in allowing a maximum of three adjournments without guaranteeing that all such adjournments must be granted. The Court further held that denial of adjournments beyond statutory limits and supply of illegible documents to the assessee do not violate principles of natural justice in GST adjudication proceedings.
Facts:
MHJ Metaltechs Pvt. Ltd. (“the Petitioner”) is an assessee against whom a show cause notice and adjudication order were passed by the Central Goods and Services Tax (CGST), Delhi (“the Respondent”) alleging fraudulent availment of Input Tax Credit (ITC) to the tune of Rs. 7.08 Crores as part of a larger GST fraud amounting to Rs. 155 Crores. The Petitioner filed replies and sought adjournments during the proceedings.
The Respondent contended that the adjudication proceedings were conducted in accordance with law, including the provisions under Section 75(5) of the CGST Act, which limits the number of adjournments to a maximum of three. The Respondent argued that all procedural requirements were complied with, and illegible documents supplied to the Petitioner did not invalidate the proceedings.
The Petitioner contended that denial of more than three adjournments and supply of illegible documents amounted to violation of natural justice. The Petitioner approached the Delhi High Court through writ petition challenging the adjudication order and sought relief.
The Delhi High Court upheld the Respondent’s adjudication order interpreting Section 75(5) as limiting adjournments to three maximum but not mandating that all three adjournments must be granted. The High Court also held that the supply of illegible documents did not vitiate the proceedings. The Petitioner then filed a Special Leave Petition before the Supreme Court under Article 136 challenging the High Court’s decision.
Issue:
Whether the discretionary jurisdiction of the Supreme Court under Article 136 is to be exercised to interfere with adjudication proceedings upholding limitation on adjournments under Section 75(5) of the CGST Act and denial of natural justice claim when statutory appellate remedy is available?
Held:
The Hon’ble Supreme Court in SLP Civil Diary No. 33710/2025 held as under:
- Observed that, the delay of 29 days in refiling the petition was condoned.
- Noted that, the case was not fit for exercise of discretionary jurisdiction under Article 136 of the Constitution of India as adequate statutory appellate remedies are available under Sections 107 and 108 of the CGST Act.
- Held that, the Delhi High Court’s interpretation of Section 75(5) CGST valid, as it contemplates a maximum of three adjournments but does not mandate granting all three.
- Held that, the supply of illegible documents during proceedings does not vitiate the adjudication process or violate principles of natural justice.
- Held that, the petitioner has liberty to avail statutory remedies by way of appeal before the Appellate Authority extending the time for filing appeal up to October 15, 2025 and dismissed the Special Leave Petition.
Our Comments:
The Supreme Court’s dismissal of the SLP reinforces judicial caution in exercising extraordinary jurisdiction under Article 136 when effective statutory remedies are accessible. The Court’s endorsement of the High Court’s interpretation of Section 75(5) of the CGST Act, aligns with the legislative intent to balance procedural fairness with administrative efficiency by limiting adjournments to a maximum of three without guaranteeing concession of all.
The judgment also clarifies that procedural irregularities like supply of illegible documents, without resulting prejudice impacting fairness, do not amount to infraction of natural justice principles. This affirms settled jurisprudence that not every procedural infirmity invalidates proceedings absent demonstration of substantial injustice.
Relevant Provision:
Section 75(5) of the Central Goods and Services Tax Act, 2017:
“The proper officer shall, if sufficient cause is shown by the person chargeable with tax, grant time to the said person and adjourn the hearing for reasons to be recorded in writing:
Provided that no such adjournment shall be granted for more than three times to a person during the proceedings.”
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