Delhi HC Flags Errors in GST SCNs; ITC Fraud Issues to Be Raised in Statutory Appeal

A V Metals Marketing Pvt Ltd Vs Principal Commissioner CGST And Anr (Delhi High Court)

The Delhi High Court, in A V Metals Marketing Pvt Ltd vs Principal Commissioner CGST & Anr, addressed a writ petition filed under Article 226 of the Constitution challenging an Order-in-Original dated 21st January 2025 issued by the Additional Commissioner of Central GST, Delhi North. The petitioner contested a demand raised under the impugned order relating to allegations of fraudulent availment of Input Tax Credit (ITC). The High Court reiterated that writ jurisdiction is generally not appropriate in cases involving complex GST investigations, particularly where statutory remedies under the Central Goods and Services Tax Act, 2017 (CGST Act) are available.

The petitioner’s counsel argued that no proper hearing was provided and relied on a typographical error in the show cause notice (SCN) mentioning the due date for filing a reply as 28th August 2025 instead of 28th August 2024. The Court noted that even if the later date were accepted, there was no evidence of any reply having been filed. The impugned proceedings arose from a larger investigation involving 16 taxpayers suspected of transferring ITC through GSTR filings without actual inward supplies from their declared suppliers. The investigation revealed that several firms did not exist, and ITC of over Rs. 122 crores had been transferred to 1,155 recipients from 79 fake entities. The petitioner’s liability under the impugned order was Rs. 23,20,171.