M/S Rahul Steels Through Its Authorised Signatory Rahul Gandhi vs. Union Of INDIA

Held

The High Court held that the issue of circular trading is indeed liable to be decided in the presence of all five assessees. In light of the changed circumstances, specifically the admission of writ petitions and grant of interim relief to the other four assessees involved in the same circular trading, the Court found it necessary for the petitioner to participate alongside them. Therefore, the Court recalled its earlier order dated December 17, 2024, and restored the writ petition of M/s Rahul Steels to its original number. The Court reasoned that to allow the petitioner to challenge the final order passed by the adjudicating authority by way of amendment in the writ petition, along with the other four assessees, was appropriate given the interconnected nature of the circular trading allegations. The review petition was disposed of on this basis.

Facts

The petitioners, M/s Rahul Steels, filed a writ petition challenging a show cause notice issued under Sections 74 and 122 of the CGST Act, 2017, alleging tax evasion through circular trading. The High Court dismissed their writ petition on December 17, 2024, reasoning that the petitioner could not be singled out for adjudication of circular trading. Subsequently, four other assessees, who received a joint show cause notice with the petitioner, filed their writ petitions (W.P.No.40867/2024 and connected matters). These petitions were admitted, and interim relief was granted on February 10, 2025, after the revenue passed a final order on January 21, 2025, which was also challenged via amendment. The present review petition was filed seeking to recall the dismissal order of the petitioner's writ petition.

Key Issues

1. Whether the High Court was justified in dismissing the writ petition of M/s Rahul Steels solely on the ground that it could not be singled out for adjudication of circular trading, especially when other similarly situated assessees were granted relief? 2. Whether the subsequent events, including the admission of writ petitions and grant of interim relief to other assessees involved in the same circular trading, constitute a change in circumstances warranting review of the earlier dismissal order? Petitioner's Arguments: Shri Ajay Bagadia, learned senior counsel, argued that the review petition should be allowed to restore the writ petition. He contended that the issue of circular trading needs to be decided in the presence of all five assessees. The subsequent favorable orders for the other four assessees demonstrate a change in circumstances, necessitating the petitioner's participation in challenging the final order alongside them. Revenue's Arguments: Shri Prasanna Prasad, learned counsel for the respondent, did not present any specific arguments against the review petition as recorded in the judgment. The judgment notes that the respondent's counsel had previously asked for time to file a reply and oppose admission and interim relief in the other writ petitions.