GST Update

Desk of CA. Praveen Sharma – 913 Series (CAPS)

Delhi High Court in the case of VDR Colors and Chemicals Pvt. Ltd. and A V Metals Marketing Pvt. Ltd.

The Delhi High Court heard writ petitions challenging GST adjudication orders alleging fraudulent availment of input tax credit based on DGARM reports and alleged fake invoices.

The petitioners contended that principles of natural justice were violated due to non-grant of personal hearing, whereas the department submitted that hearings were granted but not availed.

The Court noted that the replies filed to the show cause notices were vague and did not effectively rebut allegations relating to non-receipt of goods and bogus transactions.

It was observed that mere absence of proof of dispatch of hearing notices does not automatically vitiate adjudication when overall procedural fairness is evident.

The Court reiterated that writ jurisdiction should be exercised sparingly, especially in cases involving serious allegations of fake ITC and disputed questions of fact.

Reliance was placed on Supreme Court and Delhi High Court judgments highlighting that an effective statutory remedy of appeal is available under Section 107 of the CGST Act.

Despite the expiry of limitation for filing appeal, the Court granted a special opportunity to the petitioners to file appeals subject to statutory pre-deposit.

Accordingly, the writ petitions were disposed of, permitting the petitioners to file appeals on or before 31 January 2026, with all issues kept open for consideration by the appellate authority.

LINK: CA. Praveen Sharma on Linkedin

Regards
CAPS