Writ Jurisdiction Not Applicable in cases involving fraudulent availment of ITC: Delhi HC Dismisses Petition on Availability of Statutory Remedy [Read Order]

In a recent case, the Delhi High Court held that where cases involving fraudulent availment of ITC are concerned, considering the burden on the exchequer and the nature of impact on the GST regime, writ jurisdiction ought not to be usually exercised in such cases. Further directed to avail appellate remedy under the statute.

The petitioner , Mahavir Metal House challenged the Order-in-Original bearing no. 98/ADC/D.N./Shaukat Ali Nurvi/2024-25 dated 01st February, 2025 (‘the impugned order’). Vide the impugned order, demands and penalties have been raised against the Petitioner. The impugned order arises out of Show Cause Notice dated 11th June, 2024 ( ‘the SCN’).

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The allegations raised by the Department against the Petitioner entity in the said SCN is that the Petitioner entity fraudulently availed Input Tax Credit ( ‘ITC’). The ITC which was availed by the Petitioner entity was to the tune of Rs.2,38,062/- and it is this amount which was set out in the SCN as the undue benefit which was reaped by the Petitioner.

The Court has considered the matter. As held by the Supreme Court in Civil Appeal No. 5121/2021 titled Assistant Commissioner of State Tax and Ors. v. M/s Commercial Steel Limited , a writ petition can be entertained under exceptional circumstances.

The nature of the allegations against the Petitioner in the present case, as is clear from the SCN as also the impugned order is that the Petitioner, in collusion with other entities has taken substantial benefit of ITC without sale of any goods or services. This strikes at the root of the Input Tax Credit facility which is recognised in the GST regime.

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A division bench of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta found that an appeal before the appellate authority is a full-fledged remedy provided under Section 107 of the Central Goods and Service Tax Act, 2017.

The contentions that the Petitioner wishes to raise can always be raised in appeal, in as much as the Court has already taken a view in W.P.(C) 5737/2025 titled Mukesh Kumar Garg vs. Union of India & Ors. In the said case, the Court, has already taken a view in this regard that where cases involving fraudulent availment of ITC are concerned, considering the burden on the exchequer and the nature of impact on the GST regime, writ jurisdiction ought not to be usually exercised in such cases.

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