Facts of the Case

• The Petitioner company received a Show Cause Notice dated 24‑Jul‑2024 and the consequential Order‑in‑Original dated 04‑Feb‑2025 raising large demands under GST on the ground of fraudulent availment and passing on of Input Tax Credit (ITC) involving bogus suppliers.
• The department alleged that 53 firms were bogus entities created to generate ineligible ITC. Of these, 21 firms fell under the respondent Commissionerate’s jurisdiction, one being the Petitioner.
• The Petitioner was found to have availed ITC of approx. Rs. 3.98 crore and passed on ITC of approx. Rs. 4.75 crore, allegedly ineligible under the GST regime.
• The Petitioner contended it was not connected with the bogus entities and relied on factual records to rebut the claim. 

Legal Issues Involved

  1. Whether the writ petition under Article 226 of the Constitution could be entertained against the GST demand/order involving alleged fraudulent availment of Input Tax Credit.
  2. Whether the High Court should exercise writ jurisdiction in view of availability of an alternative remedy of appeal under Section 107 of the CGST Act.
  3. Whether wrongful ITC availment raised factual issues unsuitable for contention in writ petition rather than by statutory appeal.

Petitioner’s Arguments

• The Petitioner argued that it was not connected with the alleged bogus firms.
• It contended that the demand raised by way of show cause notice and order was unsustainable and unjustified.
• The Petition asserted entitlement to challenge the order via writ as the remedy provided under the statute was ineffective or insufficient. 

Respondent’s (CGST Dept) Arguments

• The Department argued that substantial factual matters requiring detailed inquiry were involved.
• The demands raised under GST involved serious allegations that should be scrutinized by the appellate mechanism rather than writ jurisdiction.
• Appealed that the writ petition was not maintainable since an appeal under Section 107 of CGST Act was available. 

Court’s Order / Findings

The Delhi High Court declined to entertain the writ petition, holding that:
• The matter involved extensive factual disputes as to the authenticity and identity of suppliers and therefore was not fit for interference in writ jurisdiction.
• The availability of an effective alternative remedy under Section 107 of the CGST Act mandated the Petitioner to pursue the appellate route.
• The Court noted its earlier view in similar matters (e.g., W.P.(C) 5815/2025 in M/s MHJ Metal Techs v. Central GST) that writ jurisdiction should not be exercised where fraudulent ITC cases are concerned, given burden on the public exchequer and statutory remedies available.
 The Petitioner was permitted to file an appeal before the appropriate appellate authority by 30‑Nov‑2025 with requisite pre‑deposit, failing which the writ would be dismissed. 

Important Clarification

• Writ jurisdiction under Article 226 is discretionary and not ordinarily invoked where detailed factual inquiry is necessary — especially in GST evaluations involving allegations of fraud.
• Alternative remedy via statutory appeal must be exhausted before approaching the High Court.

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/75431102025CW62712025_165253.pdf

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