Delhi HC Dismisses Writ Against GST Demand for Fictitious Firms

Jain Bhadri Graphics Vs Additional Commissioner (Delhi High Court)

Delhi High Court has dismissed a writ petition filed by Jain Bhadri Graphics, which sought to challenge a Demand-cum-Show Cause Notice (SCN) and a subsequent Order-in-Original related to allegations of operating fictitious firms and availing fraudulent Input Tax Credit (ITC). The Court, in its order, concluded that the jurisdictional challenge raised by the petitioner was not tenable and directed the assessee to pursue the statutory appellate remedy available under the Central Goods and Services Tax (CGST) Act, 2017.

The case originated from a Demand-cum-Show Cause Notice dated July 24, 2024, issued by the Joint Director, Directorate of Goods & Service Tax Intelligence, Zonal Unit, Meerut. This SCN laid out serious allegations against Jain Bhadri Graphics, asserting its involvement in running numerous fictitious and non-existing firms for the purpose of fraudulently availing ITC. Investigations by the Respondent-Department reportedly uncovered more than 87 entities involved in such schemes, leading to a criminal complaint being lodged under Section 132(1)(b) of the CGST Act, 2017.

Petitioner’s Grievances and Jurisdictional Challenge

Jain Bhadri Graphics filed a reply to the SCN on January 23, 2025, and subsequently attended a personal hearing. However, the petitioner contended that the personal hearing was not properly conducted, primarily because it raised a challenge to the jurisdiction of the investigating authority. The petitioner argued that the impugned Order-in-Original, dated February 2, 2025, issued by the Additional Commissioner, CGST Delhi (West), was passed without a proper hearing.