Facts of the Case

M/s Amit Metalics Company was subjected to proceedings under Section 74 of the CGST/OGST Act, 2017 by the Joint Commissioner of State Tax, Rourkela-II Circle, alleging wrongful availment and utilisation of Input Tax Credit for December 2023 to March 2024 on transactions with M/s Swastik Trade Ventures and M/s MG Trade and Services, said to be based on fake invoices. The impugned order dated 1 July 2025 raised a demand of Rs.72,63,912/- (tax Rs.34,49,536/-, interest Rs.3,64,840/- and penalty Rs.34,49,536/-). The petitioner had replied to the show-cause notice dated 29 October 2024 with supporting documents. Aggrieved, it approached the Orissa High Court at Cuttack under Articles 226/227, which heard the matter on 18 September 2025.

Issues Involved

  1. Whether the finding that the petitioner's suppliers were non-existent, and the consequent denial of Input Tax Credit under Section 74, was correctly recorded on the material on record.
  2. Whether such a factual controversy over the genuineness of suppliers and invoices can be adjudicated by a writ court under Articles 226/227.
  3. Whether the petitioner should instead be relegated to the statutory appellate remedy.

Petitioner's Arguments

  • The petitioner had filed a reply to the show-cause notice dated 29.10.2024 along with documents establishing the genuineness of its Input Tax Credit claims on transactions with the two suppliers.
  • It is the Revenue that bears the burden of proving that the transactions were with non-existent suppliers, and the adjudicating authority did not properly evaluate the evidence placed before it.
  • The finding that the transactions were fraudulent was erroneous and not supported by a proper appreciation of the material on record, warranting interference by the writ court.

Respondent's Arguments

  • The Department, through a formal instruction from the Commissionerate of CT & GST, Odisha, demonstrated that the petitioner's claimed suppliers were non-existent — the owner of the land housing M/s MG Trade and Co. had been dead for about ten years, and the person named in M/s Swastik Trade Ventures' rent agreement denied executing it.
  • The factual findings recorded in the assessment order warranted no writ interference.

Court Order / Findings

  • The Court noted the adjudicating authority had recorded specific findings, based on departmental verification, that the suppliers' claimed places of business were fictitious — one landowner dead for a decade, and a purported executant of a rent deed denying it.
  • A writ court exercising jurisdiction under Articles 226 and 227 must restrain itself from entering into disputed questions of fact regarding the genuineness of suppliers and invoices, which fall within the domain of the fact-finding authorities under the GST Act.
  • Without expressing any opinion on the merits, the Court relegated the petitioner to the alternative statutory remedy, granting four weeks' liberty to approach the appellate authority, which shall consider the matter expeditiously.
  • The writ petition was disposed of with these observations; no independent ruling was rendered on the separate signature/DIN or natural-justice contentions.

Important Clarification

  • Genuineness of suppliers and the existence of fake invoicing under Section 74 are quintessentially factual controversies that a writ court will not adjudicate on merits, since evidence must be threadbare-analysed by the fact-finding authority.
  • Departmental verification reports — for instance showing a landowner deceased for years, or a denied rent agreement — can sustain a Section 74 finding at the writ stage pending appeal, and the assessee's remedy lies in placing rebuttal evidence before the appellate authority, not the High Court.

Sections Involved

  • Section 74, CGST Act, 2017 / OGST Act, 2017 — determination of tax short-paid or Input Tax Credit wrongly availed by reason of fraud, wilful misstatement or suppression of facts.
  • Articles 226 and 227, Constitution of India — writ jurisdiction and its self-imposed limits on disputed questions of fact.

Decision – In Favour of

Disposed of with directions; effectively in favour of the Department at the writ stage — no interference with the Section 74 order, and the petitioner relegated to the statutory appellate remedy.

Case Details

Court: High Court of Orissa at Cuttack. Case No.: W.P.(C) No. 24393 of 2025. Coram: The Hon'ble the Chief Justice (Harish Tandon) and Hon'ble Mr. Justice Murahari Sri Raman. Date of Order: 18 September 2025.

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