Toshniwal Electricals Pvt Ltd Vs Principal Commisisoner of Central Tax Delhi North & Ors. (Delhi High Court)
The Delhi High Court heard a writ petition filed under Article 226 challenging an Order-in-Original dated 28 January 2025 issued by the Principal Commissioner of Central GST, Delhi North, raising a demand of ₹9,81,070 against the petitioner. The petitioner argued that no personal hearing had been granted and that the order violated principles of natural justice. The dispute arose from an investigation into alleged fraudulent availment of Input Tax Credit (ITC). According to the Department, scrutiny of GSTR filings of 16 taxpayers revealed almost no inward ITC from their declared suppliers, leading to the conclusion that the 16 firms did not actually exist. Further analysis of outward supplies reported by 72 previously non-existent firms and seven additional firms suggested that over ₹122 crore of ITC had been transferred to 1155 taxpayers. Notices were issued to these 1155 recipients, some of whom paid approximately ₹5.24 crore. The petitioner, listed at serial number 211 in the impugned order, was assessed for liability of ₹9,81,072.
The Court reiterated its consistent position that in cases involving alleged fraudulent ITC availment, writ jurisdiction is ordinarily not exercised. Such matters typically involve complex transactional chains, voluminous evidence and detailed factual examination by departmental authorities. The Court emphasized the need to balance the burden on the state exchequer and the impact on the GST regime against the interests of petitioners, who have a statutory appellate remedy.
