Aman Sanitation Vs Principal Commissioner (Delhi High Court)
The petitioner filed a writ petition under Article 226 challenging the Order-in-Original dated 21 January 2025 passed by the Principal Commissioner of Central GST, Delhi North, wherein a demand of ₹1,11,41,684 was raised. The petitioner argued that no personal hearing was granted and that its reply dated 5 August 2024 was not considered, amounting to a violation of natural justice. The department disputed this, stating that the reply was acknowledged and addressed in the impugned order.
The matter arose from an investigation into alleged fraudulent availment of Input Tax Credit (ITC). The investigation covered 16 taxpayers suspected of availing and transferring substantial ITC through GSTR filings, despite minimal inward ITC from declared suppliers. The department concluded that these firms likely did not exist. Further scrutiny of outward supplies reported by 72 previously identified non-existent firms and seven others showed ITC transfers exceeding ₹122 crore to 1155 taxpayers. Notices were issued to all 1155 recipients connected with 79 fake entities, and some recipients voluntarily paid approximately ₹5.24 crore. The petitioner was listed at serial number 19 in the order, with a liability exceeding ₹1.11 crore.
The Court reiterated its consistent position that writ jurisdiction is generally not exercised in cases involving fraudulent ITC claims because such matters require detailed factual scrutiny, analysis of complex transactions, and consideration of extensive evidence. Such issues are better adjudicated by the statutory appellate authority. The Court highlighted the need to balance the integrity of the GST regime and the burden on the exchequer with the petitioner’s right to appeal.
