Mahesh Fabrinox Pvt. Ltd Vs Union of India & Anr. (Delhi High Court)
Delhi High Court has dismissed a writ petition challenging a demand raised for the alleged fraudulent availment of Input Tax Credit (ITC), imposing a cost of ₹1 lakh on the petitioner. The court observed a pattern of using writ petitions on technical grounds to evade consequences in cases involving large-scale GST fraud and emphasized the need for circumspection in exercising writ jurisdiction in such matters, particularly when the petitioner’s conduct appears questionable.
The case, Mahesh Fabrinox Pvt. Ltd Vs Union of India & Anr., arose from an Order-in-Original dated February 1, 2025, passed by the Additional Commissioner, Central Goods and Services Tax, which raised a demand against Mahesh Fabrinox Pvt. Ltd. for fraudulently claiming ITC.
According to the allegations outlined in the show cause notice (SCN) dated August 4, 2024, and the subsequent order, one Mr. Karan Kumar Agarwal had allegedly established a network involving numerous firms to commit GST fraud. The scheme purportedly involved creating or using these firms to issue fabricated invoices without any actual movement of goods. Based on these invoices, entities like the petitioner firm would then fraudulently avail ITC. The petitioner firm was alleged to be one such entity that had raised invoices against one of the purportedly fake firms set up by Mr. Agarwal, thereby enabling the pass-on of fraudulent ITC benefits.
