Fraudulent ITC Demand Not Entertained in Writ – Appeal Directed

Case Details: Aman Sanitation vs. Principal Commissioner, CGST [2025] 181 taxmann.com 365 (Delhi)

Judiciary and Counsel Details

Prathiba M. Singh & Shail Jain, JJ.
Shivender Kr. Sharma & Urooj Chaudhary, Advs. for the Petitioner.
Pranay Mohan Govil, SSC for the Respondent.

Facts of the Case

The petitioner challenged an order-in-original on the ground of alleged fraudulent Input Tax Credit (ITC). The proceedings arose from an investigation into fake entities transferring ITC, with notices issued identifying the petitioner as a purported recipient of liability. The petitioner submitted that the demand violated the principles of natural justice due to the absence of a personal hearing and the failure to consider its reply. It was contended that the demand should be quashed. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that writ jurisdiction in fraudulent ITC matters is generally not exercised, given the complex facts and potential exchequer impact. The Court clarified that writ relief under Article 226 of the Constitution of India is available only in limited circumstances, such as violations of fundamental rights, breaches of natural justice, excess of jurisdiction, or challenges to vires. Since the petitioner was aware of the notices and had responded, no exceptional ground arose. The Court did not interfere with the demand order. It directed the petitioner to pursue an appeal under Section 107 of the CGST Act, subject to a pre-deposit.