Mahalaxmi Industries Vs Union of India & Ors. (Gujarat High Court)
The Gujarat High Court rejected a writ petition challenging an Order-in-Original dated 23.03.2026 passed under Section 74 of the Central Goods and Services Tax Act, 2017, confirming recovery of ineligible Input Tax Credit (ITC) of ₹1,46,76,034. The petitioner challenged the order despite the availability of an appellate remedy under Section 107 of the CGST Act.
The proceedings arose from a Show Cause Notice dated 10.06.2023 issued to the petitioner and six other suppliers proposing action under Sections 74 and 122 of the CGST Act for allegedly availing fake ITC on the basis of invoices issued by Delhi-based non-existent firms.
During the hearing, the Revenue pointed out that another entity, M/s Mahalaxmi Metal Industries, had earlier challenged an Order-in-Original arising from the same Show Cause Notice through a writ petition, which had subsequently been withdrawn to pursue the statutory appeal. The advocate appearing in both matters stated that the earlier writ petition neither referred to nor challenged the same Show Cause Notice. The High Court directed the Registry to place the earlier case records before it.
Upon examining those records, the Court found that the earlier writ petition had in fact annexed the same Show Cause Notice and that both proceedings arose from it. The Court also noted that the allegations in both matters were similar, that both entities operated from nearby addresses, were run by closely related individuals, and that the Show Cause Notice and Order-in-Original described their links with the Delhi-based firms from which fake ITC invoices had allegedly been availed. The Court observed that the statement made by the advocate had misled the Court.
