Facts of the Case

The Petitioner, M/s Jain Bhadri Graphics, filed a writ petition under Articles 226 and 227 of the Constitution of India challenging:

  • Demand-cum-Show Cause Notice dated 24.07.2024
  • Order-in-Original dated 02.02.2025

The case arose from allegations of:

  • Operation of multiple fictitious/non-existing firms
  • Fraudulent availment of Input Tax Credit (ITC)
  • Investigation involving more than 87 entities
  • Initiation of criminal proceedings under Section 132(1)(b) of the CGST Act

The Petitioner had filed a reply to the Show Cause Notice and attended the personal hearing. However, it alleged procedural and jurisdictional defects.

Issues Involved

  1. Whether the authority issuing the Show Cause Notice and passing the order had proper jurisdiction under the CGST Act
  2. Whether the personal hearing granted to the Petitioner was valid and adequate
  3. Whether the writ petition was maintainable when an alternative statutory remedy exists

Petitioner’s Arguments

  • The adjudicating authority lacked proper jurisdiction
  • The matter was heard by an incorrect CGST Commissionerate (Delhi North instead of Delhi West)
  • The corrigendum correcting jurisdiction was allegedly backdated and issued after the personal hearing
  • Proper opportunity of hearing was not granted
  • The entire proceedings were vitiated due to lack of jurisdiction

Respondent’s Arguments

  • Jurisdiction was validly conferred through Notifications dated:
    • 11th March 2022
    • 25th November 2024
  • The power to issue notices under Sections 73 and 74 CGST Act was vested in:
    • Principal Commissioner, Delhi North
    • Later expanded to Commissioner, Delhi West
  • The Petitioner was granted adequate opportunity of hearing
  • The reply filed by the Petitioner was duly considered 

Court’s Findings / Order

The Delhi High Court held:

  • Jurisdiction was validly established through relevant notifications
  • The Principal Commissioner, Delhi North initially had jurisdiction, which was later expanded
  • The Petitioner had been granted an opportunity of personal hearing
  • No ground existed to invoke writ jurisdiction

Final Order:

  • The Petitioner was relegated to the Appellate Authority under Section 107 of the CGST Act
  • If appeal is filed within 30 days with mandatory pre-deposit:
    • It shall not be dismissed on limitation
    • It shall be decided on merits
  • All contentions were kept open

Important Clarifications by Court

  • Jurisdiction challenges must be assessed in light of statutory notifications
  • Writ jurisdiction will not be entertained where:
    • Statutory appellate remedy exists
    • Due process has been followed
  • Even disputed procedural irregularities should be raised before appellate authorities

Sections Involved

  • Article 226 & 227 – Constitution of India
  • Section 73 & 74 – CGST Act, 2017
  • Section 107 – Appeal to Appellate Authority (CGST Act)
  • Section 132(1)(b) – Offences relating to fraudulent ITC

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/68924042025CW32602025_124633.pdf

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