Ambika Traders Vs Additional Commissioner (Delhi High Court)
The Delhi High Court considered a writ petition filed by Ambika Traders, a metal-scrap sole proprietorship, under Articles 226 and 227 of the Constitution challenging an Order-in-Original dated 23 January 2025 and accompanying DRC-07 dated 4 February 2025. The order confirmed a demand of Rs.83,76,32,528/- towards allegedly fraudulently availed and utilised Input Tax Credit (ITC), imposed an equivalent penalty, and imposed a separate penalty on proprietor Mr. Gaurav Gupta. A corrigendum dated 18 March 2025 corrected the proprietor’s penalty from Rs.1,00,000/- to Rs.75,000/-.
The DGGI had conducted searches on 3 August 2021, following which the proprietor was arrested on 4 August 2021 and released on regular bail on 22 October 2021. A Show Cause Notice (SCN) dated 29 May 2023 covered financial years 2017-18 to 2021-22 and alleged fraudulent ITC based on invoices issued by non-existent or fake supplier firms.
The Petitioner contended that its replies dated 19 December 2024 and 30 December 2024 were not considered, contrary to Section 74(9) of the CGST Act and principles of natural justice. It also relied on Circular No. 171/03/2022-GST dated 6 July 2022, challenged the SCN and order on the ground that demands could not be confirmed beyond the grounds in the SCN under Section 75(7), objected to the consolidated notice covering multiple financial years, and challenged denial of cross-examination. The Petitioner further contended that the appellate authority under Section 107 could not remand the matter.
