Ambika Traders Vs Additional Commissioner (Supreme Court of India)
The Hon’ble Supreme Court of India in Ambika Traders v. Additional Commissioner [SLP (C) 23774 of 2025, dated September 01, 2025] upheld the decision of Delhi High Court in the matter Ambika Traders v. Addl. Commissioner, Adjudication DGGSTI [W.P.(C) 4853/2025, dated July 29, 2025] wherein the High Court affirmed that Section 74(3) and (4), Central Goods & Service Tax Act, 2017 (“the CGST Act”) permit notices “for any period” or “such periods,” unlike Section 74(10) CGST Act which uses the term “financial year.” Fraudulent Input Tax Credit (“ITC”) often span multiple years, and a consolidated Show Cause Notice (“SCN”) is permissible. The High Court was also of the opinion that Writ Petition is not the appropriate remedy for the discussion on non-granting of Cross Examination to the Petitioner, if remedy of appeal is still not exhausted.
Facts:
M/s Ambika Traders (“the Petitioner”), engaged in scrap trading, was alleged to have availed fraudulent Input Tax Credit (ITC) between Financial Year 2017–18 and 2021–22. The department discovered that ITC was claimed against invoices issued by non-existent suppliers without any actual supply of goods.
Directorate General of GST Intelligence/ the Department (“the Respondent”) issued a Show Cause Notice (SCN) under Sections 74, read with 122 of the CGST Act, covering multiple years. The Order-in-Original (“OIO”) confirmed the demand, denied ITC, and imposed an equivalent penalty under Section 74 of CGST Act, along with penalties on the proprietor under Section 122(3) of CGST Act.
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