Delhi HC Refuses to Entertain Writ Petition Against ITC Denial Over Non-Service of SCN, Directs Petitioner to Avail Appellate Remedy [Read Order]

The High Court of Delhi, refuses to entertain a writ petition challenging denial of Input Tax Credit ( ITC ) worth ₹26.95 lakhs under GST ( Goods and Services Tax ) on the ground of non-service of ShowCause Notice (SCN), holding that the order was appealable under Section 107 of GST Act.

Soham Industries, petitioner-assessee, challenged the order dated 31st December 2024, passed by the Assistant Commissioner, CGST, based on a SCN issued on 2nd August 2024. The order denied ITC of ₹26,95,895, raised a demand for interest, and imposed an equivalent penalty under the CGST, IGST, and Delhi SGST Acts.

The department alleged that the petitioner had received supplies from 18 non-existent firms and that the petitioner itself was not operational at its registered premises. Although personal hearings were fixed on 29.10.2024, 13.11.2024, and 04.12.2024, the petitioner did not appear. It was submitted that the SCN was never served.

The Senior Standing Counsel of the department accepted notice in the morning and argued that the petitioner should pursue the appellate remedy.

The Court noted that the impugned order was appealable under Section 107 of the CGST Act and was not inclined to entertain the writ petition. It relied on its earlier decision in Mukesh Kumar Garg vs. Union of India & Ors., where it had held that serious allegations involving fake firms and fraudulent ITC claims required detailed factual examination, which could not be undertaken in writ jurisdiction.

Justice Prathiba M.Singh and Justice Rajneesh Kumar Gupta observed that such matters should be addressed through proper appellate channels and that allowing writ petitions in such cases would result in multiplicity of proceedings and possible contradictory findings. However, since the petitioner claimed non-receipt of the SCN, the Court directed that a copy be provided within a week at the given email address.

ReM/S SOHAM INDUSTRIES vs CENTRAL GOODS AND SERVICE TAX Read More: Blocked GST ITC u/r 86A Must Beif Appeal is Filed by Depositing 10% Disputed Tax: Madras HC

The petitioner was permitted to file an appeal before the appellate authority under Section 107 of the CGST Act by 14th August 2025, along with the necessary pre-deposit. The petition was accordingly disposed of.

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