Facts of the Case

The petitioner, Ashish Enterprises, a proprietary concern of Mr. Ashish Gupta, filed a writ petition challenging the Show Cause Notice dated 02.08.2024 and the Order-in-Original dated 22.01.2025 passed by the Assistant Commissioner, CGST Delhi East. By the impugned order, Input Tax Credit amounting to ₹1,06,93,571 was disallowed and an equivalent penalty was imposed.

The Show Cause Notice was issued pursuant to investigation conducted by the Directorate General of GST Intelligence, Jaipur Zonal Unit, in relation to fraudulent availment and passing of Input Tax Credit by M/s Akshat International, New Delhi. During investigation, it was found that 32 fake entities were allegedly floated by one Mr. Abhishek Gupta, Chartered Accountant, and the petitioner was identified as one of the major beneficiaries who had availed fake ITC from such entities over multiple years.

Issues Involved

Whether issuance of a consolidated Show Cause Notice and adjudication order covering multiple financial years was permissible under Sections 73 and 74 of the CGST Act, whether writ jurisdiction should be exercised against an appealable Order-in-Original, and whether the petitioner should be relegated to the statutory appellate remedy.

Petitioner’s Arguments

The petitioner contended that the impugned Show Cause Notice was illegal as it covered multiple financial years in a single notice. It was further argued that proceedings on the same subject matter had allegedly been dropped by the Delhi GST authorities and therefore the Central GST Department could not take a contrary stand. The petitioner also submitted that the Order-in-Original was passed without properly considering the reply filed to the Show Cause Notice.

Respondent’s Arguments

The Revenue submitted that the impugned order was appealable under the CGST Act and that no exceptional circumstances existed for invocation of writ jurisdiction. It was argued that Sections 73 and 74 of the CGST Act expressly permit issuance of notices for “any period” or “such periods” and that consolidated notices are not barred, particularly in cases involving fraudulent availment of ITC. Reliance was placed on binding precedents of the Delhi High Court.

Court Order / Findings

The Delhi High Court examined the statutory framework of Sections 73 and 74 of the CGST Act and relied upon its earlier detailed judgment in Ambika Traders through Proprietor Gaurav Gupta vs. Additional Commissioner, Adjudication DGGSTI, CGST Delhi North (2025:DHC:6181-DB).

The Court held that the language used in Sections 73(3), 73(4), 74(3) and 74(4) clearly permits issuance of notices for “any period” or “such periods”, which may span more than one financial year. The Court observed that in cases of fraudulent availment or utilisation of ITC, consolidated notices are not only permissible but often necessary to establish the pattern of fraud across years.

The Court further held that the impugned Order-in-Original was appealable and that no jurisdictional error or violation of natural justice was demonstrated warranting interference under Article 226 of the Constitution.

Important Clarification

The High Court clarified that fraudulent ITC cases frequently involve interconnected transactions across multiple financial years and therefore consolidated notices and orders do not violate the CGST Act. Challenges to merits of such orders must ordinarily be raised before the statutory appellate authority rather than in writ jurisdiction.

Final Outcome

The writ petition was disposed of. The petitioner was relegated to the statutory appellate remedy. The Court granted liberty to Ashish Enterprises to file an appeal against the Order-in-Original dated 22.01.2025 and summary in DRC-07 before the Appellate Authority on or before 31.10.2025, along with the requisite pre-deposit. The appeal, if filed within the said period, shall not be dismissed on the ground of limitation and shall be adjudicated on merits. All rights and contentions of the parties were left open. Pending applications, if any, were disposed of accordingly.

Source Link- https://delhihighcourt.nic.in/app/showFileJudgment/PMS09092025CW121922025_175429.pdf


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