Devansh Wire And Cables Private Limited Vs Joint Commissioner (Delhi High Court)
The case concerns a challenge to a consolidated Show Cause Notice (SCN) and subsequent orders issued under Section 74 of the CGST Act regarding alleged wrongful availment of Input Tax Credit (ITC). The assessee was issued an SCN dated 30 July 2021 alleging fraudulent ITC claims amounting to ₹10.70 crore through fictitious firms and bogus invoices without actual supply of goods. The allegations stemmed from departmental investigations, during which the director of the assessee company was arrested and later granted bail. The assessee submitted replies to the SCN, but an Order-in-Original dated 1 January 2025 was passed confirming recovery of IGST, CGST, and SGST ITC along with interest and penalties under Section 74. Penalties were also imposed on the company’s director under Section 122(3).
The assessee filed a writ petition challenging the SCN and the Order-in-Original on multiple grounds. The core argument was that a consolidated SCN covering several financial years is not legally sustainable. Other grounds included alleged non-issuance of proper demands under Rule 142 for relevant years and claims that the Order-in-Original did not address their reply. Parallelly, a second writ petition challenged a Provisional Attachment Order dated 21 November 2023 that froze two bank accounts and attached an industrial property. The first attachment order issued in November 2020 had already been declared non-operative due to the expiry of the statutory one-year period under Section 83(2).
