The court determined that prior actions of the petitioners facilitated fraudulent GST claims, leading to dismissal of petitions challenging tax liabilities.

JUDGMENT :

Prathiba M. Singh, J. 

1. This hearing has been done through hybrid mode.

2. The present petitions have been filed by the Petitioner- M/s Radhey Traders through its Proprietor Sopal Singh under Articles 226 and 227, of the Constitution of India, inter alia, assailing the Order-in-Original dated 5th April 2024 passed by Assistant Commissioner, CGST Delhi East Commissionerate, confirming the demand of wrongly availed ineligible ITC of Rs.1,14,49,600/- on the Petitioner along with imposition of interest and penalty. In addition challenge is also to the Order-in-Original dated 27th August, 2024 confirming demand of Rs. 8,19,60,228/- on the Petitioner due to difference in tax liability as per GSTR-1 and GST-3B and further demand of ineligible ITC of Rs. 19,55,588/- from inward suppliers whose GSTINs have been cancelled retrospectively along-with imposition of interest and penalty (hereinafter, ‘the impugned orders’).

3. The case of the Petitioner herein is that he obtained the Goods and Services Tax (hereinafter ‘GST’) Registration on 23rd November, 2018. Thereafter, a Show Cause Notice was issued to the Petitioner on 15th December, 2023 (hereinafter ‘SCN’), raising various allegations of wrongful availment of Input Tax Credit (hereinafter, ‘ITC’) after the due date of furnishing the returns.

4. According to the Petitioner, this SCN was never served upon him. The Petitioner is stated to have obtained the GST registration and not conducted any business with the said registration thereafter.

5. However, it was only around some time in March 2024, when a notice under Section 148A of the Income Tax Act, 1961 was issued by the Income Tax Department (hereinafter ‘IT Department’) to the Petitioner, when the Petitioner came to know that his GST registration number has been misused for sales of over Rs.50 Crores for the Financial Year 2019- 2020.

6. According to the Petitioner, he has filed various complaints, both before the Kavi Nagar Police Station, Ghaziabad as also with the GST Department. An FIR has also been registered being FIR No.0281/2024, P.S. Special Cell (Delhi).

7. It is thus the case of the Petitioner that all along, he was not aware of the SCN as also the impugned orders, which have now been passed against him. Hence, the present petition.

8. Ld. Counsel for the Respondents submitted on the last date of hearing that the GST registration number of the Petitioner has been misused for all the alleged transactions, without his knowledge.

9. On the last date of hearing, a status report was called for from the Delhi Police and the said status report dated 8th August, 2025 has now been filed. The report reveals as under:

“2. The complainant had alleged that on 23/11/2018, he got registered a firm namely "Radhey Traders" with GST No 07BGIPS5434H1Z4 for doing business but he could not start his business. After registration of firm, as he did not do any business transactions, hence neither he made/issued any bill in the name of Radhey Traders nor any GST return was filed by him. In the year of 2019 the complainant visited the GST Office for surrendering his firm GST number as he was informed that in case of non-filing of GST return, he had to pay penalty to GST department. Therefore, he Visited GST office wherein he was informed that in case of nonoperation, his GST number will be deactivated automatically. Thereafter, he shared this information with one person namely Tara Chand Sagar who told the oomplainant to deactivate his GST number and asked for OTP from the complainant to process the same. On the directions of Tara Chand, complainant shared OTP with him to deactivate his GST number.
3. On 22.03.2024, complainant got a notice from Income tax under clause (b) of section 148A of the Income Tax Act, 1961 wherein it was informed that bills of Rs. 50,34,71,932 was made/issued in the name of Radhey Traders from April 2019 to December 2019 As per the complainant he has no knowledge of these bills and there is also no record in his bank