Sanchayita Lahkar

The High Court of Delhi Division Bench of Justice Prathiba M. Singh and Justice Renu Bhatnagar dismissed a writ petition challenging a tax adjudication order imposing a penalty on the petitioner for an alleged role in facilitating ineligible CENVAT credit through purportedly fraudulent, goods-less invoices for PVC resin, allegedly issued for commission. The petitioner also complained that relied-upon documents were not supplied. The Bench held that the restraint applied in complex GST/ITC fraud matters—where disputes involve detailed factual scrutiny and significant revenue impact—also applies to allegations of fraudulent CENVAT credit, making writ intervention inappropriate in such cases. While dismissing the petition, it allowed the petitioner to pursue a statutory appeal, directing that an appeal filed by 31 January 2026 should be decided on merits without being rejected as time-barred.

The writ petition arose from proceedings initiated by the tax authorities alleging fraudulent availment of CENVAT credit through issuance of invoices without actual supply of goods. Acting on intelligence received by the Directorate General of GST Intelligence, Delhi Zonal Unit, searches were conducted at various premises in December 2020, including those connected with entities involved in the alleged transactions. Statements of persons associated with one such entity indicated that invoices had been issued without movement of goods and that commissions were paid for raising such invoices.

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The petitioner’s statement was recorded during a search in January 2021, wherein admissions were attributed regarding issuance of invoices without actual supply of PVC resin and receipt of commission amounts. Based on the investigation, a show cause notice dated May 2021 was issued to multiple notices, including the petitioner. The petitioner sought copies of relied upon documents but did not file a reply on merits or retract the recorded statement. An order-in-original was thereafter passed imposing a monetary penalty under the Central Excise Rules, read with the CGST Act.

Before the High Court, the petitioner challenged the order primarily on the ground of non-supply of relied upon documents and relied upon submissions recorded in respect of another notice. The respondent authorities opposed the writ petition, pointing to the petitioner’s non-participation in adjudication proceedings and availability of a statutory appellate remedy.

The Court recorded that the petitioner had been fully aware of the show cause notice and yet “no reply was filed before the Adjudicating Authority”. It noted that “not even an iota of attempt was made by the Petitioner to rebut or explain the allegations” contained in the notice.

With respect to reliance on submissions of another notice, the Court observed that “the reliance on paragraph 3.3 of the impugned order where the submission of [the other firm] is recorded would not assist the Petitioner”, as that entity appeared to have participated in the adjudication process.

The Court further noted that the impugned order itself recorded that several notices had filed replies, while “the Petitioner chose not to do so”. Referring to the adjudication record, it was observed that “the Petitioner’s statement which stands un-retracted even on date has been relied upon by the adjudicating authority”, indicating an admission that had remained unrefuted.

On the scope of writ jurisdiction, the Court stated that in matters involving alleged fraudulent availment of tax credit, “there are complex transactions involved which require factual analysis and consideration of voluminous evidence”. It recorded that in such circumstances, “writ jurisdiction ought not to be exercised ordinarily”.

Relying on earlier decisions, including those of the Supreme Court and coordinate benches, the Court reiterated that where an appealable order exists and no exceptional circumstance is shown, parties should be relegated to the statutory appellate remedy. The Court also noted the burden on the exchequer and the potential impact on the GST regime arising from such alleged transactions.

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The Court held that “the petition is lacking any merit and is dismissed” and recorded that “this Court is not inclined to entertain the present writ petition. All pending applications are disposed of.”

“The Petitioner is given an opportunity to file an appeal challenging the impugned order. If the appeal is filed in accordance with law by 31st January, 2026, the appeal shall not be dismissed on the ground of being barred by limitation and shall be adjudicated on merits.”

“The observations made by this Court shall not bind the Appellate Authority if the appeal is filed in accordance with law.”

Advocates Representing the Parties

For the Petitioners: Mr. Akshat Vachher, Advocate; Mr. Shrey Lodha, Advocate
For the Respondents: Ms. Anushree Narain, Senior Standing Counsel; Mr. Naman Choula, Advocate

Case Title: Navneet Bansal v. Additional Commissioner, CGST Delhi North

Neutral Citation: 2025:DHC:11539-DB                                                                                

Case Number: W.P.(C) 4723/2025

Bench: Justice Prathiba M. Singh, Justice Renu Bhatnagar