Delhi HC quashes GST Writ Over Alleged Fraudulent ITC; Petitioner Directed to Statutory Appeal

VSA Trading Private Limited Vs Principal Commissioner CGST And Anr (Delhi High Court)

VSA Trading Private Limited filed a writ petition under Article 226 of the Constitution of India before the Delhi High Court, challenging an Order-in-Original dated 21st January 2025 issued by the Additional Commissioner of Central GST, Delhi North, which demanded tax liability from the petitioner. The petitioner argued that proper hearing was not provided and that the due date for filing the reply contained a typographical error, mentioning 28th August 2025 instead of 28th August 2024. The petitioner contended that these issues constituted a violation of the principles of natural justice.

The case arose from an investigation into the alleged fraudulent availment of Input Tax Credit (ITC) under the Central Goods and Services Tax Act, 2017. The investigation covered 16 taxpayers who were alleged to have transferred substantial ITC through GSTR filings without receiving genuine inward supplies. The scrutiny indicated that the suppliers of these ITC claims were largely non-existent, raising suspicion of fictitious transactions. In total, the ITC transferred by these firms exceeded ₹122 crores to 1,155 recipients. The CGST-Delhi North Commissionerate issued notices to these recipients, including VSA Trading Private Limited, which was assigned serial number 68 with a liability of ₹34,47,419 as per the impugned order. Some noticees had already paid approximately ₹5.24 crores.