GST Update

Desk of CA. Praveen Sharma – 1082 Series (CAPS)

Decision: In favour of the Respondent/Revenue.

Delhi High Court Directs GST Petitioners to Use Statutory Appeal Remedy

The Delhi High Court, in the case of M/s Vleadit & Another v. Additional Commissioner, CGST Delhi West & Others, declined to interfere with a common GST adjudication order involving 629 firms and individuals.

The case arose from allegations concerning a large fake-invoice network. According to the GST Department, certain persons had created and operated 107 fake firms for issuing invoices without any actual supply of goods. Several businesses were accused of wrongfully claiming input tax credit based on these invoices.

M/s Vleadit and another petitioner challenged the adjudication order before the High Court. They argued that the show-cause notice did not specify their individual roles and that their detailed replies were not properly considered by the adjudicating authority.

The petitioners further claimed that they were involved in only one transaction with Sahuwala Exports Private Limited. Therefore, their cases should have been examined separately.

The High Court observed that the adjudication order was based on statements, accounts, invoices, electronic records and transactions involving numerous entities. Determining the precise role of each petitioner and whether their replies had been properly considered required a detailed examination of disputed facts and evidence.

The Court held that such factual issues could not appropriately be examined under its writ jurisdiction. These matters should be considered by the statutory Appellate Authority under the GST law.

Accordingly, the Court declined to interfere with the adjudication order and permitted the petitioners to pursue the available appellate remedy.

Key takeaway: Where a GST dispute involves disputed facts, voluminous evidence and multiple entities, taxpayers should ordinarily approach the statutory Appellate Authority instead of directly invoking the High Court’s writ jurisdiction.

LINK:CA. Praveen Sharma on Linkedin

Regards
CAPS