R Gupta Metal Store Vs CGST (Delhi High Court)
The Delhi High Court heard a writ petition challenging an order dated 4 February 2025, through which tax demands were raised against the petitioner following an investigation into fraudulent Input Tax Credit (ITC). The case originated from notices issued to 670 parties concerning bogus firms operating in Sita Ram Bazar and Naya Bazar. The investigation revealed 55 non-existent supplier firms that had allegedly passed on inadmissible ITC exceeding ₹553 crore to 5,962 beneficiaries. The petitioner was listed at serial number 209, and after conclusion of the investigation, a Show Cause Notice dated 3 August 2024 was issued. The petitioner submitted a reply on 14 October 2024, which, according to its counsel, was not properly considered by the adjudicating authority.
The respondent opposed the maintainability of the writ petition on the grounds that the case involved fraudulent ITC and that the appeal remedy was not available due to substantial delay. The Court reiterated its consistent view that matters involving fraudulent ITC typically require detailed factual analysis, review of voluminous evidence, and consideration of the impact on the GST regime, making writ jurisdiction inappropriate. It relied on the Supreme Court’s ruling in Commercial Steel Limited, which emphasized that writ jurisdiction under Article 226 should not be exercised when adequate statutory remedies exist unless exceptional circumstances are shown.
