RST Batteries & Anr. Vs Directorate General of Goods and Service Tax Intelligence Gurugram Zonal Unit & Anr. (Delhi High Court)
The Delhi High Court, in the case of RST Batteries & Anr. Vs. Directorate General of Goods and Service Tax Intelligence, declined to exercise its writ jurisdiction under Article 226, directing the petitioners to utilize the alternate statutory remedy of appeal. The petitioners challenged a GST demand of approximately ₹18.83 crore raised against them for the Assessment Year 2019-20, which arose from allegations of fraudulent availment and passing on of Input Tax Credit (ITC) without the actual supply of goods or services. The Department’s case, stemming from intelligence and a search operation, was that the petitioners were involved in a “maze of passing of fake/bogus invoices.”
The petitioners sought relief on the grounds that the adjudicating authority failed to consider a Central Board of Indirect Taxes and Customs (CBIC) Circular dated July 6, 2022. They contended that applying the circular would have only subjected them to a penalty under Sections 122(1)(ii) and 122(1)(vii) of the CGST Act, rather than the full tax demand. However, the High Court reiterated its established view that cases involving fraudulent ITC and a series of linked, bogus transactions involve complex factual issues that are unsuitable for adjudication in a writ petition. The court cited the Supreme Court’s ruling in The Assistant Commissioner of State Tax & Ors. v. M/s Commercial Steel Limited, which held that writ petitions should be entertained only in exceptional circumstances, such as a breach of fundamental rights or natural justice, excess of jurisdiction, or a challenge to the vires of a statute.
