The Delhi High Court declined to grant relief to a GST consultant accused of facilitating one of the largest fake Input Tax Credit (ITC) scams in recent years, involving over Rs. 285 crore routed through dozens of non-existent firms.
The bench of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta has observed that the fraudulent availment of large quantum of ITC to the tune of ₹285 crore through 54 firms shows deep connivance. The petitioner, being a GST consultant and an ex-employee of the VAT Department, clearly leveraged his expertise to assist in this scam
Bhupender Kumar is a GST consultant against whom a show cause notice was issued on 8th March, 2024 by the Directorate General of Goods and Service Tax Intelligence, Ghaziabad Regional Unit (DGGI) along with three other individuals namely Sh. Naveen Monga, Sh. Anoop Kumar and Sh. Sanjay Sehgal. He was accused of aiding Sanjay Sehgal, alleged mastermind of the racket, in creating and operating over 60 fake firms. Investigations revealed that 54 of these firms were used for fraudulent availment and passing of ITC without any actual supply of goods or services.
According to the Directorate General of GST Intelligence (DGGI), Kumar received identity documents, SIM cards, and PAN cards from Sehgal to register bogus firms. He was allegedly paid ₹5,000 per registration and provided login credentials of these entities to Sehgal, who then issued fake invoices and returns.
Searches at Kumar’s residence uncovered multiple PAN cards, SIM cards, and incriminating WhatsApp chats with Sehgal, establishing his role in the conspiracy. Sehgal himself admitted during investigation that the firms were fake and that Kumar, along with two others, had created them on his directions.
On February 1, 2025, the CGST Department imposed:
- A penalty of ₹285.66 crore under Section 122(1A) of the CGST Act.
- Additional penalties of ₹75,000 each under Sections 122(3) and 125 of the Act.
Kumar challenged the order, arguing that:
- No specific notice under Section 122(1A) was issued to him, making the penalty illegal.
- He was only a consultant, while Sehgal was the mastermind.
However, the Court held that the show cause notice contained clear allegations against Kumar and that he failed to file a reply or contest the charges. The judges observed that he had knowingly facilitated fraudulent registrations and could not now claim innocence.
The bench expressed concern over the systemic misuse of the ITC mechanism, calling such frauds a serious threat to the GST framework.
It added that writ jurisdiction under Article 226 could not be used to assess complex factual disputes in such fraud cases, emphasizing that the proper remedy lay in filing an appeal under Section 107 of the CGST Act.
Case Details
Case Title: Bhupender Kumar Versus Additional Commissioner Adjudication CGST Delhi North & Ors.
Case No.: W.P.(C) 9141/2025 & CM APPL. 38815/2025
Date: 07th July, 2025
Counsel For Petitioner: Abhishek Garg
Counsel For Respondent: Monica Benjamin
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