Non‑Disclosure of Turnover and Wrong Availment of GST ITC: Delhi HC Directs Petitioner to Reply to SCN [Read Order]

The Delhi High Court, in a recent case, has directed the petitioner to respond to the show cause notice(SCN) as the petitioner had not disclosed the turnover in the petition and also failed to file a reply on the ground that there was an availment of input tax credit, which led to the violation of section 16 of the CGST ( Goods and Services Tax ) Act.

The petitioner, Lakdhatar Enterprises, approached the Court contending that no decision had been taken on the SCN for nearly two years, leaving its case unresolved. However, the Court noted that the petitioner had not filed any reply to the SCN and had also failed to disclose material facts in its writ petition.

On the last date of hearing, counsel for the respondent submitted that the petitioner had kept its GST registration valid only for eight to nine months, during which its turnover exceeded ₹17.5 crores.

The Court observed that this crucial fact had not been disclosed in the petition. It further noted that purchases had been made from cancelled dealers, raising serious questions about the genuineness of ITC claims.

In its earlier order dated 25 August 2025, the Court had directed the petitioner to file an affidavit disclosing the nature of business, total turnover during the registration period, and ITC availed or passed on.

Despite this direction, the affidavit was not filed. Respondent counsel produced turnover details showing ₹6.69 crore for 2022–23 and ₹9.95 crore for 2023-24, reinforcing the concerns about non‑disclosure.

Against this backdrop, the Division Bench of Justice Prathiba M. Singh and Justice Shail Jain held that the petitioner must file a reply to the impugned SCN. The Court directed the Department to proceed with adjudication in accordance with law, thereby disposing of the writ petition.

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