Delhi High Court Declines Writ Petition Against GST Demand Over Alleged Fraudulent ITC Availment
Court directs use of statutory appeal under CGST Act; refuses to intervene in serious tax evasion case
The Delhi High Court has refused to entertain a writ petition challenging a GST demand and penalty arising from allegations of fraudulent Input Tax Credit (ITC) claims, holding that such cases must follow the statutory appellate route under the Central Goods and Services Tax (CGST) Act, 2017.
The bench of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta stressed that writ jurisdiction under Article 226 should not be exercised where alternative remedies exist — unless there are exceptional circumstances like a breach of fundamental rights or violation of natural justice.
The Court referred to precedents from the Supreme Court and its own recent judgment in Mukesh Kumar Garg v. Union of India, emphasizing that fraudulent ITC cases strike at the core of the GST regime and require detailed factual examination best suited for appellate authorities.
“Allowing such petitions would create an enormous dent in the GST regime itself,” the Court observed, citing the widespread misuse of ITC claims by non-existent or shell entities.
The petition challenged an Order-in-Original issued on February 1, 2025, which was based on a Show Cause Notice alleging that the petitioner fraudulently availed ITC worth ₹2.38 lakh. The petitioner had argued procedural defects, including that the show cause notice and final order were issued by different authorities and covered multiple financial years in one consolidated action.
Holding that there was no violation of natural justice or statutory overreach, the Court dismissed the writ but clarified that the petitioner could still file a statutory appeal under Section 107 of the CGST Act.
The court also noted that a related issue on consolidated show cause notices is pending before the Court in Quest Infotech Pvt. Ltd. & Anr. v. Union of India, and any decision in that case would apply to future proceedings in this matter.
Case Details
Case No.: W.P.(C) 8280/2025 & CM APPL. 36074/2025
Date: 30.05.2025
Counsel For Petitioner: Pranay Jain
Counsel For Respondent: Anushree Narain
Mariya is the Senior Editor at JurisHour. She has 5+ years of experience on covering tax litigation stories from the Supreme Court, High Courts and various tribunals including CESTAT, ITAT, NCLAT, NCLT, etc. Mariya graduated from MLSU Law College, Udaipur (Raj.) with B.A.LL.B. and also holds an LL.M. She started as a freelance tax reporter in the leading online legal news companies like LiveLaw & Taxscan.
