The Delhi High Court has held that the consolidated show cause notice (SCN)/orders for multiple years are permissible in fake Input Tax Credit (ITC) claim cases wilful misstatement.
The bench of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta has observed that a consolidated notice is, therefore, not merely permissible but, in fact, required in cases wherein in order to establish the substantial amount of ITC allegedly availed by businesses and entities for multiple years (in the present case from 2017 to 2021).
The bench stated that the language of the provision itself does not prevent issuance of SCN or order for multiple years in a consolidated manner. The details of the amounts for each year are set out clearly in the content of the order itself and is, therefore, clearly decipherable. Thus, it cannot be held that the issuance of consolidated notice or order violates the language of the provisions. Especially, in the case of fraudulent availment of ITC or utilization of ITC such consolidated notice and order would not just be permissible but may, in fact, be required to show the wilful misstatement or suppression or the fraudulent availment/utilization.
The Petitioner/assessee is stated to be a firm dealing in metal scrap. A search operation was carried out at the residential premises of the proprietor of the Petitioner as also at its sales office. Various records/files were resumed by the GST Department from the premises. The proprietor of the Petitioner, i.e. Mr. Gaurav Gupta was, thereafter, arrested by the Directorate General of GST Intelligence (DGGI), Meerut Zonal Unit.
Mr. Gaurav Gupta was released on regular bail.
A Show Cause Notice was issued to the Petitioner along with form DRC-01 by the DGGI, Ghaziabad Regional Unit for the financial years 2017-2018, 2018-2019, 2019-2020, 2020-2021 and 2021-2022. Vide the SCN, a demand of Rs. 83,76,32,528/- was raised against the Petitioner on the ground of alleged fraudulent availment and wrongful passing on of Input Tax Credit.
The petitioner contended that consolidated SCN for multiple financial years has been issued under Section 74 of CGST Act, which is impermissible.
The court held that the order is an appealable order under Section 107 of the CGST Act and there is a substantive appellate remedy available to the Petitioner. The allegation that an opportunity of cross-examination was not afforded to the Petitioner is completely misplaced as such proceedings of SCN cannot be converted into mini-trials.
The court held that the writ petition is not liable to be entertained especially since the Petitioner has an alternative, effective and efficacious remedy available.
Case Details
Case Title: Ambika Traders Versus Additional Commissioner
Case No.: W.P.(C) 4853/2025, CM APPL. 22194/2025 & CM APPL. 22195/2025
Date: 29th July 2025
Counsel For Petitioner: Rajesh Jain
Counsel For Respondent: R. Ramachandran, Sr. Standing Counsel
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