GST Update

Desk of CA. Praveen Sharma – 1071 Series (CAPS) 

 Delhi High Court: GST Demand Based on Electronic Data and “Kachcha Parchis”

Bhagwati Electronics & Others v. Union of India & Others and Connected Matters
W.P.(C) 2179/2026 and batch | 2026 LLBiz HC (DEL) 813

Bhagwati Electronics and several other businesses approached the Delhi High Court against GST demand orders connected with an investigation into M/s Arora Communication.

The GST Anti-Evasion Branch alleged that M/s Arora Communication was selling electronic goods without issuing proper tax invoices and without paying GST.

During the search, officials reportedly recovered a laptop, electronic devices, handwritten “kachcha parchis” and other documents. The Department analysed the recovered material and claimed that it contained details of unaccounted sales made without GST invoices.

Based on this evidence, notices under Section 74 of the CGST Act were issued to M/s Arora Communication and several alleged purchasers, including the petitioners.

The petitioners argued that the demands were mainly based on electronic records and loose papers recovered from a third party. According to them, the Department had not conducted any independent investigation or collected supporting evidence against them.

They also argued that the electronic records could not be relied upon without the certificate required under Section 63 of the Bharatiya Sakshya Adhiniyam, 2023.

The Delhi High Court observed that the authenticity of electronic data, legal value of “kachcha parchis” and availability of supporting evidence were factual matters requiring detailed examination of the complete record.

The Court refused to decide these issues in writ proceedings and dismissed the petitions. However, the petitioners were allowed to raise all their objections before the competent GST appellate authority.

???? Key Takeaway: Questions relating to third-party data, electronic evidence and “kachcha parchis” should ordinarily be examined in a statutory GST appeal where the complete evidence can be properly considered.

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Regards

CAPS