Manpar Exim Inc Vs Additional Director (Delhi High Court)
The petition challenges an Order-in-Original dated 22 October 2025, through which a demand of ₹9,60,15,714 was confirmed against the petitioner on allegations of availing and passing on fake Input Tax Credit (ITC). The petition also raises objections against the absence of a pre-show cause notice (pre-SCN) consultation under Rule 142(1A) of the GST Rules. The case involves allegations against one Parag Garg, stated to be the mastermind behind incorporation of multiple non-existent entities used for availing or passing on ITC; searches were conducted at premises linked to him, and he is also a partner in the petitioner firm and a co-petitioner. The Order-in-Original sets out the manner in which ITC was allegedly availed or transferred and confirms tax, interest, and multiple penalties under Sections 74, 122, 125, and related provisions of the CGST, SGST, and IGST Acts. The order also appropriates ₹1.66 crore already paid during investigation and imposes penalties on several noticees, including the petitioner.
The petitioner argues that although it is within limitation to file an appeal, the SCN issued on 12 March 2025 and the resulting order are invalid because no pre-SCN consultation notice was issued as required under the earlier Rule 142(1A). It submits that this ground was raised in reply but not considered. The petitioner further challenges the constitutional validity of Notification No. 79/2022-Central Tax dated 15 October 2020, through which “shall” in Rule 142(1A) was replaced with “may,” making pre-SCN consultation discretionary.
