Lawgics – Judgment No. 201

Synopsis: The Delhi High Court dismissed the writ petition involving fraudulent ITC claims, directing the petitioner to pursue appellate remedy u/s 107 of the CGST Act.

Caste name: Banson Enterprises & Anr. vs Assistant Commissioner CGST & Ors.

Citation: W.P. (C) 6503/2025 dated 15.05.2025

Authority: Delhi High Court

Brief facts of the case:

The petition challenges the Order-in-Original dated 02.02.2025 based on a Show Cause Notice (SCN) dated 03.08.2024 A search was conducted, and statements were recorded including that of one Director admitting to the issuance of fake invoices during the Central Excise period. It was alleged that the Petitioner issued goods-less invoices to enable fraudulent Input Tax Credit (ITC) claims amounting to Rs. 1.85 crore.

Contentions of the Petitioner:

SCN was issued by unauthorized officer, thus, violates Rule 142(1)(a) of CGST Rules. No pre-consultation as required under Rule 142(1A) of CGST Rules was issued. Consolidated SCN for multiple financial years was issued and challenge to such consolidated action is pending in a separate matter (Quest Infotech case).

Contentions of the Department:
The impugned order is appealable, hence writ is not maintainable. The Petitioner’s Director admitted to allegations. Natural justice was followed as the Petitioner received the SCN, filed a reply, and availed of personal hearing. Reliance must be made on SC judgments and Allahabad HC rulings emphasizing alternate remedy u/s 107 CGST Act.

Findings and Decision of the Court:
The Court refused to interfere under writ jurisdiction, citing:

• No breach of fundamental rights or principles of natural justice.
• Availability of a statutory remedy (appeal) under Section 107 CGST Act.

The Court noted that the Allegations involve serious misuse of ITC, requiring fact-based adjudication, not suited for writ jurisdiction. Thus, the Petitioner was granted liberty to file appeal, and if filed with pre deposit, the appeal shall not be dismissed on limitation.