High Spirit Commercial Ventures Private Limited Vs Additional Commissioner CGST (Delhi High Court)
The Delhi High Court, in a hybrid hearing, considered a writ petition filed by High Spirit Commercial Ventures Private Limited challenging a Show Cause Notice dated 24th July 2024 and an Order-in-Original dated 4th February 2025. The impugned order raised demands on the petitioner for allegedly availing and passing on Input Tax Credit (ITC) from non-existent entities, part of a broader investigation involving hundreds of firms. Among these, 53 firms were identified as bogus entities set up by one Mr. Mukesh Jain, with 21 of them in the West Commissionerate jurisdiction, including the petitioner. The petitioner reportedly availed ITC of ₹3,98,98,262 and passed on ITC of ₹4,75,08,348, which the Department considered ineligible. The petitioner contended it was based in Maharashtra and had no connection with Mr. Jain.
The Department, however, noted that inspections revealed the petitioner’s business to be non-existent. Several entities, including M/s Sardar Ji Di Hatti Departmental Store Pvt. Ltd., submitted statements confirming transactions with the petitioner but failed to reverse ineligible ITC. Out of 22 investigated entities, 9 reversed ITC, supporting the Department’s claim that the allegations were substantial.
The Court emphasized that the matter involved complex factual questions concerning fraudulent ITC availment and was not suitable for adjudication under writ jurisdiction. Citing precedent in M/s MHJ Metal Techs v. Central Goods and Services Tax Delhi South, the Court reiterated that writ jurisdiction should generally not be exercised in cases involving fraudulent ITC due to the burden on the exchequer and the need for detailed factual analysis. Allegations involved a complex network of non-existent firms, and the petitioner’s role, liability, and penalties required factual determination through an appeal process.
