Banson Enterprises & Anr Vs Assistant Commissioner CGST & Ors (Delhi High Court)
The Delhi High Court recently declined to entertain a writ petition filed by Banson Enterprises, which challenged an order-in-original imposing demands and penalties related to alleged fraudulent Input Tax Credit (ITC) availment. The court emphasized the availability of an alternate statutory remedy and highlighted the serious nature of the allegations concerning tax evasion.
Background of the Case:
Banson Enterprises filed a writ petition (W.P.(C) 6503/2025) challenging an order-in-original dated February 2, 2025, which arose from a show cause notice (SCN) dated August 3, 2024. The core allegation by the Directorate General of GST Intelligence (DGGI) was that Banson Enterprises had issued “goods-less invoices” to various entities, facilitating the fraudulent availment of ITC to the tune of Rs. 1,85,73,718. The department claimed this amount represented an undue benefit reaped by the petitioner.
Banson Enterprises submitted a reply to the SCN on October 24, 2024, and also availed of a personal hearing opportunity. Following these proceedings, the impugned order imposing demands and penalties was issued.
Petitioner’s Arguments:
Counsel for Banson Enterprises, Mr. Shrey Lodha, raised three primary issues challenging the impugned order:
- Authority to Issue SCN: It was argued that the SCN was issued and signed by an officer who lacked the proper authority under Rule 142(1)(a) of the Central Goods and Services Tax Rules, 2017, which mandates that the “proper officer” issue the summary of the SCN along with the SCN itself.
- Lack of Pre-Consultation: The petitioner contended that there was no pre-consultation prior to the issuance of the SCN, as required by Rule 142(1A) of the Central Goods and Service Tax Rules, 2017.
- Consolidated SCN for Multiple Financial Years: Banson Enterprises argued that a single, consolidated SCN was issued for multiple financial years, leading to a consolidated impugned order. This issue, it was noted, was also under consideration by the Delhi High Court in a separate case, Quest Infotech Pvt. Ltd. & Anr. v. Union of India (P.(C) 4392/2025).
Respondent’s Arguments and Judicial Precedents:
