Delhi High Court Dismisses Writ Petition in Rs 50.33 Crore GST ITC Fraud

Delhi High Court Dismisses Writ Petition in Rs 50.33 Crore GST ITC Fraud

In a recent case of GST credit fraud, the Delhi High Court has dismissed the writ petition filed by Ganpati Polymers, a firm accused of availing ineligible Input Tax Credit (ITC) worth over Rs 50 crore.

The GST department in the impugned order accused two men, named Mr Rajesh Jindal and Mr Adesh Jain, of issuing fake invoices without the actual movement of goods. The department claimed that these two set up and managed various fake firms, which are non-existent. These firms were established under the names of persons who were also being controlled by them. During inspection, it was found that these firms were used to pass on inadmissible ITC to various other firms. The CGST department seized some documents and digital devices found during the search.

The petitioner, Ganpati Polymers, was also accused of being connected with the GST fraud. Due to this, they were issued a Show Cause Notice dated 05.08.2024 and also the Order-in-Original dated 01.02.2025 along with DRC-07 dated 09.02.2025. The petitioner filed a writ petition challenging these three orders.

The learned counsel of the petitioner submitted that the petitioner could not file a reply to the show cause notice because the petitioner’s GST registration had been suspended since 3rd February 2022. He further submitted that the petitioner was not checking the GST portal regularly and therefore, he did not know about the notices and the hearing dates. The petitioner also submitted that the impugned order was passed late.

The bench, comprising Justice Prathiba M. Singh and Justice Renu Bhatnagar, observed that the petitioner was given the opportunity for a personal hearing, but the petitioner failed to reply or attend the hearing even though the petitioner knew about the investigation going against him. The court called this callous conduct. The court also clarified that the order was issued within the specified period.

Therefore, the court dismissed the petition, and the petitioner was ordered to pay Rs 50,000 as cost to the Delhi High Court Bar Association within 2 weeks. The court also allowed the petitioner to file a writ petition under Section 107 of the CGST Act before 31st August, 2025. If the appeal is filed by that date, the appellate authority shall not reject it as time-barred, and it must be decided on its merits.