Adhvik Polychem's GST Registration Cancellation: Delhi High Court Directs Firm to Appeal

Court Refuses to Bypass Statutory Remedy

The Delhi High Court has declined to entertain a writ petition filed by Adhvik Polychem challenging the rejection of its application for cancellation of GST registration. A Division Bench of Justices Anil Kshetarpal and Rajneesh Kumar Gupta directed the firm to pursue the statutory remedy of appeal under Section 107 of the Central Goods and Services Tax (CGST) Act, 2017 , noting that the dispute involved examination of disputed questions of fact best suited for the appellate authority.

Background: Allegations of Fake Documents and ITC Abuse

The case arose after the petitioner applied for cancellation of its own GST registration, an application that was rejected by the Assistant Commissioner GSTO Ward 58 on June 9, 2026 . The authorities had raised multiple concerns, including that the firm sought registration based on documents whose authenticity could not be verified, that the proprietor had furnished a wrong address, and that the firm was non-existent at its communication address. The rejection order further alleged that Adhvik Polychem had availed excess input tax credit (ITC), engaged in passing ITC from non-existent firms, and failed to respond to multiple show-cause notices and demand proceedings.

The department disclosed a significant increase in the firm's turnover—from approximately ₹9.92 crore in FY 2022-23 to over ₹45 crore in FY 2025-26 —which the court noted as a relevant context.

Petitioner's Plea of Harassment Rejected

Counsel for the petitioner argued that the company was being "harassed unnecessarily" through repeated proceedings, pointing out that three earlier show-cause notices for cancellation had been dropped. The petitioner had already submitted a reply to the latest show-cause notice on June 16, 2026 . However, the court observed that the impugned order noted the petitioner failed to appear for a personal hearing scheduled on June 8, 2026 .

Court's Reasoning: Disputed Facts Best Left to Appellate Authority

While acknowledging that the existence of an alternative remedy does not oust the jurisdiction of a constitutional court under Article 226, the Bench emphasized that it is a relevant factor in deciding whether to exercise discretionary writ jurisdiction . "Particularly where adjudication of the dispute may require examination of disputed questions of fact and appreciation of the material placed on record ," the court noted, the remedy of appeal becomes more appropriate.

The court also highlighted that the proceedings arose "in the backdrop of the concerns being addressed by the Department in relation to allegedly non-existent and fictitious GST registrations," underscoring the need for factual scrutiny.

Key Observations

The court made the following pivotal observations:

"Undoubtedly, the jurisdiction of a Constitutional Court under Article 226 of the Constitution is not ousted merely on account of availability of an alternative remedy . At the same time, the existence of such remedy is a relevant consideration in determining whether the discretionary writ jurisdiction should be exercised, particularly where adjudication of the dispute may require examination of disputed questions of fact and appreciation of the material placed on record ."

"The present proceedings arise in the backdrop of the concerns being addressed by the Department in relation to allegedly non-existent and fictitious GST registrations."

Final Order

Without expressing any opinion on the merits, the court disposed of the writ petition, relegating the petitioner to the alternative remedy of appeal under Section 107 of the CGST Act. The Bench clarified that the appellate authority would decide the matter uninfluenced by the court's observations.

The decision reinforces the principle that when factual disputes and serious allegations of tax evasion are involved, courts are likely to insist on exhaustion of statutory remedies before entertaining constitutional writ petitions.