Facts of the Case

The petitioner, Devansh Wire and Cables Private Limited, challenged a Show Cause Notice dated 30th July, 2021 and an Order-in-Original dated 1st January, 2025 passed under Section 74 of the CGST Act alleging wrongful availment of input tax credit amounting to approximately ₹10.70 crores through fictitious firms on bogus invoices without actual supply of goods. The investigation included arrest of the company’s Director, who was later granted bail. Replies to the show cause notice were filed by the petitioner on 6th September, 2021 and 12th December, 2023. The impugned order confirmed recovery of IGST, CGST and SGST along with interest and equivalent penalties, and also imposed penalties on the Director under Section 122(3) read with Section 137 of the CGST Act.

Parallelly, provisional attachment orders were issued under Section 83 of the CGST Act, first on 18th November, 2020 and subsequently on 21st November, 2023 attaching immovable property and bank accounts of the petitioner. Recovery proceedings under Section 79 were also initiated during pendency of the writ petitions.

Issues Involved

Whether a consolidated show cause notice covering multiple financial years is permissible under Section 74 of the CGST Act, whether the impugned order-in-original suffered from procedural infirmities under Rule 142 of the CGST Rules, whether the petitioner should be relegated to the statutory appellate remedy under Section 107 of the CGST Act, and whether the provisional attachment under Section 83 could survive beyond the statutory period of one year.

Petitioner’s Arguments

The petitioner contended that issuance of a consolidated show cause notice for multiple financial years was impermissible in law, that demand under Rule 142 was not properly issued for the relevant periods, and that the order-in-original failed to deal with the replies filed by the petitioner. It was further argued that the provisional attachment and recovery proceedings were illegal, arbitrary and unsustainable, especially since the attachment had continued beyond the statutory period prescribed under Section 83 of the CGST Act.

Respondent’s Arguments

The Revenue opposed the petitions contending that the consolidated show cause notice was valid under Section 74 of the CGST Act and that serious allegations of fraudulent availment of ITC were involved. It was submitted that the impugned order was appealable under Section 107 of the CGST Act and that the petitioner ought to avail the statutory appellate remedy instead of invoking writ jurisdiction.

Court Order / Findings

The Delhi High Court held that the issue of validity of consolidated show cause notices for multiple periods stood conclusively settled by its earlier decision in Ambika Traders Through Proprietor Gaurav Gupta v. Additional Commissioner, wherein it was held that Sections 73 and 74 of the CGST Act permit issuance of notices “for any period” and “for such periods”, thereby allowing consolidated notices across multiple financial years. The Court noted that the SLP against the said decision had been dismissed.

The Court further held that the impugned order dated 1st January, 2025 was an appealable order and that the petitioner ought to pursue the statutory appellate remedy. Considering that the writ petition was filed within the limitation period, the Court granted the petitioner liberty to file an appeal before the Commissioner (Appeals) along with the requisite pre-deposit, with a direction that the appeal shall not be dismissed on the ground of limitation and shall be decided on merits.

In respect of the provisional attachment order dated 21st November, 2023, the Court held that the statutory period of one year under Section 83 of the CGST Act had already lapsed, rendering the attachment infructuous and invalid. Consequently, the attachment of bank accounts and immovable property, as well as recovery communications issued during pendency of the writ petitions, were set aside subject to filing of appeal.

Important Clarification

The High Court clarified that while consolidated show cause notices under Sections 73 and 74 of the CGST Act are legally permissible, assessees must ordinarily avail statutory appellate remedies against adjudication orders. It was further clarified that provisional attachment under Section 83 ceases to have effect upon expiry of one year and cannot be continued beyond the statutory period.

Final Outcome

Both writ petitions were disposed of with liberty to the petitioner to file a statutory appeal before the Commissioner (Appeals) by 15th December, 2025 along with the prescribed pre-deposit, with a direction that the appeal shall not be rejected on limitation and shall be adjudicated on merits. The provisional attachment order dated 21st November, 2023 and consequential recovery actions were set aside as having become invalid upon lapse of one year under Section 83 of the CGST Act.

SOURCE LINK: https://delhihighcourt.nic.in/app/showFileJudgment/75411112025CW44552025_104403.pdf  

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