GST Update

Desk of CA. Praveen Sharma – 895 Series (CAPS)

Delhi High Court in the case of Braham Prakash, Proprietor of Shri Shyam Trading Co.

• The petitioner challenged a GST demand order dated 21 January 2025 by filing a writ petition under Article 226, mainly alleging that no personal hearing was granted and that the SCN was uploaded beyond the limitation period.

• The demand arose from an investigation by DGGI, Rohtak, relating to alleged fraudulent availment of Input Tax Credit involving a network of 18 fake firms.

• The petitioner was one among 374 entities alleged to have transacted with these fake firms, leading to issuance of the SCN and passing of the demand order.

• The petitioner claimed violation of principles of natural justice due to absence of a personal hearing before passing the order.

• The Court observed that cases involving fake ITC generally involve complex facts and disputed transactions, and therefore writ jurisdiction under Article 226 should normally not be exercised.

• It was reiterated that such matters require detailed factual examination, which is more appropriately done by the statutory appellate authority.

• Since the order is appealable under Section 107 of the CGST Act, the Court declined to interfere under writ jurisdiction.

• Even though the appeal period had expired, the Court permitted the petitioner to file an appeal by 15 January 2026 with the mandatory pre-deposit, and directed that the appeal should be decided on merits without being rejected on limitation.

LINK:CA. Praveen Sharma on Linkedin

Regards
CAPS