Probe into 108 Firms Reveals Fraudulent GST ITC Availment: Delhi HC Permits SCN to be Contested before Appellate Authority [Read Order]
The Delhi High Court referred to its own decision in the case of Mukesh Kumar Garg vs. Union of India & Ors. to decide the appealability of the case
![Probe into 108 Firms Reveals Fraudulent GST ITC Availment: Delhi HC Permits SCN to be Contested before Appellate Authority [Read Order]](https://images.taxscan.in/h-upload/2025/08/07/2073943-probe-into-108-firms-probe-into-108-firms-reveals-fraudulent-taxscan.webp "Probe into 108 Firms Reveals Fraudulent GST ITC Availment: Delhi HC Permits SCN to be Contested before Appellate Authority [Read Order]")
The Delhi High Court recently permitted a business entity alleged to have fraudulently availed Goods and Services Tax ( GST ) Input Tax Credit ( ITC ) to duly contest an adjudication order and allied Show-Cause Notice ( SCN ) issued to them before the appellate authority. The Petitioner, Malik Traders was served with an SCN indicating fraudulent availment of GST ITC across...
The Delhi High Court recently permitted a business entity alleged to have fraudulently availed Goods and Services Tax ( GST ) Input Tax Credit ( ITC ) to duly contest an adjudication order and allied Show-Cause Notice ( SCN ) issued to them before the appellate authority.
The Petitioner, Malik Traders was served with an SCN indicating fraudulent availment of GST ITC across Financial Years 2017-18 to 2021-22, following a broad investigation involving 108 firms.
The instant writ petition challenged two proceedings - the first one being against the impugned order-in-original dated 28th January 2025 covering Financial Years 2017-18 to 2021-22, and the allied Show Cause Notice dated 24th July 2024 in respect of Financial Years 2018-19 and 2019-20.
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Advocates M.A. Ansari, Tabbassum Firdause, Sameed Salim and Imran Aamad challenged the proceedings by the GST department on the ground that there existed overlapping proceedings undertaken by both the Central and State GST authorities concerning the same financial years.
Monica Benjamin, Standing Counsel for the Department submitted that no such overlapping existed as the proceedings undertaken by both departments pertained to separate transactions, even though they pertained to the same financial year. She also submitted that the petitioner had not raised any of the grounds mentioned in the Petition before the Adjudicatory Authority.
The Division Bench of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta observed that the impugned order was appealable, and that the grounds raised by the petitioner could be agitated before the appellate authority.
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The Court referred to its earlier decision in Mukesh Kumar Garg vs. Union of India & Ors., where it was held that writ petitions should ordinarily not be entertained in cases involving fraudulent ITC claims through bogus invoicing.
Accordingly, the Delhi High Court held that the appropriate remedy would be to file an appeal before the appellate authority under Section 107 of the Central Goods and Services Tax Act, 2017.
The Division Bench granted the petitioner liberty to file an appeal against the order-in-original dated 28th January 2025, along with the requisite pre-deposit. It directed that if the appeal was filed on or before 31st August 2025, the same shall not be dismissed on the ground of limitation and shall be considered on its merits.
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