Justice Prathiba M. Singh, Justice Rajneesh Kumar Gupta, Delhi High Court
Writ Jurisdiction Not To Be Ordinarily Exercised In Cases Involving Fraudulent Availment Of ITC: Delhi High Court Asks Firm To Avail Remedy U/S.107 Of CGST Act
|The Petitioner company had approached the Delhi High Court challenging the impugned order whereby a penalty had been imposed upon it for receiving invoices without actual supply of goods or services from a firm.
While asking a Firm to avail of its remedies of appeal under section 107 of the CGST Act in a case involving allegations of availment of fraudulent ITC, the Delhi High Court has reiterated that writ jurisdiction ought not to be ordinarily exercised in such cases.
The Petitioner company had approached the High Court challenging the impugned order whereby a penalty had been imposed under the CGST, SGST & IGST Acts for receiving invoices or bills without actual supply of goods or services from a firm. This was the second writ petition being filed by the Petitioner.
The Division Bench of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta said, “The contentions that the Petitioner wishes to raise can always be raised in appeal, in as much as this Court has already taken a view in W.P.(C) 5737/2025 titled Mukesh Kumar Garg vs. Union of India & Ors. that where cases involving fraudulent availment of ITC are concerned, considering the burden on the exchequer and the nature of impact on the GST regime, writ jurisdiction ought not to be ordinarily exercised in such cases.”
Advocate Shivani Sethi represented the Petitioner, while Senior Standing Counsel Shlok Chandra represented the Respondent.
Factual Background
The Petitioner was alleged to have received goods-less invoices from two firms, namely M/s. Shivaay Trading and Satyam Associates, which are firms stated to be belonging to one Aaurti Kapoor. The total availment of Input Tax Credit (ITC) was alleged to be to the tune of Rs 172 Crore through the fake and fraudulent firms and goods-less invoices. A Show Cause Notice was issued to several noticees, and allegations of fake availment of Input Tax Credit (ITC) were raised therein.
Reasoning
The Bench noted that the impugned order showed that there were 34 parties to whom SCN had been issued. In the impugned order itself, the allegation was that one Aaurti Kapoor, who was connected to all these firms, had passed on the ITC to various entities, such as the Petitioner. The Bench was of the view that the question as to whether there is a connection between the Petitioner and Aaurti Kapoor or her firms, would be a factual issue.
It was noticed that after delivery of the SCN, the Petitioner chose not to file any reply on the merits. It had filed a writ petition before the High Court, and a direction was issued for providing the petitioner with all the documents relied upon. The Bench also reaffirmed that writ jurisdiction ought not to be exercised in such cases.
On the petitioner’s contention that the RUDs were not supplied to the Petitioner and the same were furnished only on May 14, 2025, the Bench said, “Considering the nature of this matter, which involves allegations of availment of fraudulent ITC, this Court is not inclined to entertain the writ petition. Under such circumstances. The Petitioner is free to avail of its remedies under Section 107 of the Central Goods and Service Tax Act, 2017. If the Petitioner wishes to file an appeal, it may do so by 15th July, 2025 along with the requisite pre-deposit. Upon the said appeal being filed, it shall be adjudicated on merits and shall not be dismissed as being barred by limitation.”
The Bench thus disposed of the Petition in these terms.
Cause Title: Standard Cartons Pvt Ltd v. Office of the Commissioner Central Tax Delhi West and Ors. (Neutral Citation: 2025:DHC:4426-DB)
Appearance:
Petitioner: Advocate Shivani Sethi
Respondents: Senior Standing Counsel Shlok Chandra, Advocates Ujjwal Jain, Dhanunjay, SSC Ruchesh Sinha