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Case Details: Infiniti Retail Ltd. vs. Union of India - [2025] 174 taxmann.com 1097 (Delhi)

Judiciary and Counsel Details

Pratibha M. Singh & Rajneesh Kumar Gupta, JJ.
Prakash Shah, Sr. Adv., Rajat Mittal, Mohit Rawal, Mihir Mehta & Suprateek Neogi, Advs. for the Petitioner.
Anurag Ojha, SSC, Dipak Raj, Ms Garima Kumar & Deep Raj, Advs. for the Respondent.

Facts of the Case

The petitioner was subjected to a demand under Section 74 of the CGST and Delhi GST Act, 2017, primarily on the allegation of wrongful availment of input tax credit (ITC). The petitioner had earlier approached the Delhi High Court by way of a writ petition, which was disposed with directions to the adjudicating authority to independently examine the petitioner’s reply and not merely rely upon the audit memo or audit report. Subsequently, an adjudication order was passed.

The petitioner contended that the said order was passed in complete disregard of the High Court’s earlier directions and that the reply submitted in response to the show cause notice (SCN) had not been meaningfully considered. It was submitted that the order merely reiterated the contents of the SCN, summarised the petitioner’s reply without actual engagement, and mechanically confirmed the demand. The petitioner, therefore, once again approached the Delhi High Court challenging the impugned order by way of a writ petition.

High Court Held

The Delhi High Court held that although the directions issued in the earlier writ petition were not followed in letter and spirit, the impugned adjudication order appeared to have been based primarily on the SCN and returns filed by the petitioner. It was observed that while the reply submitted by the petitioner was extracted and oral submissions were recorded, the adjudication order lacked any clear explanation as to how those submissions were considered while finalising the demand.

A substantial part of the demand related to the erroneous classification of ITC—CGST and SGST instead of IGST—while the remaining issues pertained to factual determinations based on the petitioner’s returns. The Court concluded that since the validity of these demands hinged on disputed facts and examination of multiple documents, the matter exceeded the permissible scope of writ jurisdiction. Accordingly, the petitioner was directed to pursue the remedy of appeal under the statutory framework.