The Delhi High Court has refused to entertain a writ petition challenging a GST demand related to allegedly fraudulent Input Tax Credit (ITC) claimed on invoices issued by a supplier whose GST registration had been cancelled retrospectively.
The bench of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta held that since the order was appealable, the petitioner should pursue the statutory appellate remedy under Section 107 of the CGST Act, 2017. The Court cited its earlier ruling in Mukesh Kumar Garg v. Union of India, emphasizing that writ jurisdiction is not suited to fact-intensive matters involving alleged fraud and complex chains of non-existent entities.
The case pertains to a demand of Rs. 11.78 lakh raised by the Assistant Commissioner, CGST Delhi West, on grounds that the petitioner firm had availed ITC against 192 invoices issued by M/s Shivoy Enterprises — a supplier whose registration was cancelled with effect from the date of registration itself. This led tax authorities to treat the ITC as inadmissible.
The petitioner argued that the order overlapped with an earlier IGST-related order already under appeal.
The department contended that the order pertained specifically to CGST and SGST, and involved separate liability.
The Court also noted the misuse of Section 16 of the CGST Act — a key provision granting ITC benefits — by various firms creating fictitious transactions to claim tax credits without actual supply of goods or services.
While declining to intervene, the Court permitted the petitioner to file a manual appeal within one month and seek waiver of the mandatory pre-deposit, considering that the firm had already reversed the ITC amount of Rs. 21.19 lakh. The appellate authority has been directed to consider the waiver request and not dismiss the appeal on grounds of delay.
The court noted that appeal against order has already been filed and the reversal of ineligible ITC has been done by the Petitioner Firm, let the appeal against the impugned order be filed, manually, within a period of one month from the date of this order, with an application for waiver of the pre-deposit.
Case Details
Case Title: Magicon Impex Pvt. Ltd. Versus Commissioner Of Central Goods And Service Tax & Ors.
Case No.: W.P.(C) 9893/2025
Date: 15.07.2025
Counsel For Petitioner: Rajesh Mahna
Counsel For Respondent: Monica Benjamin
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