Facts of the Case

The petitioner, Radhey Traders through its proprietor, obtained a GST registration in 2018. Subsequently, the petitioner claimed that due to lack of knowledge, he approached authorities for suspension/cancellation of the GST registration.

It was alleged that the petitioner shared an OTP with an accountant for assistance in cancellation. However, the said OTP was misused, resulting in the creation of multiple firms and fraudulent Input Tax Credit (ITC) transactions amounting to a substantial sum.

An FIR was registered, and investigation was ongoing. The petitioner filed the present writ petition challenging the action taken against him and seeking relief under Article 226. 

Issues Involved

  1. Whether the High Court can adjudicate disputed questions of fact under Article 226?
  2. Whether the petitioner can claim innocence after voluntarily sharing OTP leading to alleged fraud?
  3. Whether writ jurisdiction is maintainable when criminal investigation is ongoing?
  4. Whether alternative remedies should be exhausted before invoking writ jurisdiction? 

Petitioner’s Arguments

  • The petitioner argued that the GST registration was misused without his knowledge.
  • It was contended that the misuse occurred due to actions of a third party (accountant).
  • The petitioner sought protection against coercive action and challenged the legality of proceedings initiated.
  • It was submitted that the petitioner was not directly involved in fraudulent transactions.

Respondent’s Arguments

  • The respondent argued that the petitioner himself shared the OTP, enabling misuse.
  • It was contended that multiple fake firms were created using the petitioner’s GST credentials.
  • The matter involved serious allegations of fraud and factual disputes, requiring investigation.
  • The respondent emphasized that writ jurisdiction cannot be invoked in such fact-intensive matters. 

Court’s Findings / Order

  • The Delhi High Court held that the petitioner cannot claim complete innocence after voluntarily sharing OTP.
  • The Court observed that the case involves serious disputed questions of fact and fraud, requiring detailed investigation.
  • It was held that such issues cannot be adjudicated in writ jurisdiction under Article 226.
  • The Court declined to entertain the writ petition and disposed of it, granting liberty to the petitioner to pursue remedies in accordance with law.

Important Clarifications by the Court

  • Writ jurisdiction cannot be used for fact-finding or investigation.
  • Sharing OTP voluntarily carries legal consequences and responsibility.
  • Cases involving fraud, criminal investigation, and disputed facts must be decided by appropriate forums.
  • Courts should avoid interference where alternative remedies and investigative mechanisms exist. 

Sections / Provisions Involved

  • Article 226, Constitution of India – Writ Jurisdiction
  • Goods and Services Tax (GST) Law Provisions relating to registration and ITC
  • Principles of fraud and misuse of credentials
  • Criminal law provisions relating to investigation (FIR) 

Link to download the order - https://delhihighcourt.nic.in/app/showFileJudgment/PMS11082025CW93712025_125205.pdf

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