Sunil Gulati Vs Additional Commissioner CGST Delhi South Commissionerate & Anr (Delhi High Court)
Sunil Gulati v. CGST: No respite to Accountant accused of being party to large scale GST ITC fraud : Delhi High Court Directs Accountant to Pursue Statutory Appeal in Rs. 16 Crore GST Penalty Case
In a recent decision dated April 9, 2025, the Delhi High Court dismissed a petition filed by Sunil Gulati challenging a penalty order imposed by the CGST Department. The Court directed Gulati to pursue his appellate remedy under Section 107 of the CGST Act, granting him 30 additional days to file an appeal.
Background
Gulati worked as an accountant for multiple companies including M/s XEL Infomatics, M/s NexGen Busicorp, and G W Infotech Pvt. Ltd. The CGST Department’s investigation revealed alleged fraudulent Input Tax Credit (ITC) availment involving these companies and M/s Monga Iron and Steel Pvt. Ltd.
Following investigation, the Additional Commissioner of CGST issued Order-in-Original No. 26/RK/ADC/CGST/DSC/2024-25 on January 16, 2025, imposing a substantial penalty of Rs. 16,15,28,668 on Gulati.
Key Issues
Gulati challenged the order under Articles 226 and 227 of the Constitution on three primary grounds:
1. Non-service of the Show Cause Notice (SCN)
2. Applicability of Section 122(1A) of the CGST Act, which came into effect only on January 1, 2021
3. His limited role as an accountant, contending he did not retain any benefits from the transactions
Court’s Analysis
