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IN THE HIGH COURT OF DELHI AT NEW DELHI
PRATHIBA M. SINGH, RAJNEESH KUMAR GUPTA, JJ.
Ambika Traders Through Proprietor Gaurav Gupta - Petitioner
Versus
Additional Commissioner, Adjudication Dggsti, CGST Delhi North – Respondent
W.P.(C) 4853 of 2025, CM APPL. 22194 of 2025 & CM APPL. 22195 of 2025
Decided On : 29-07-2025
Key Points: - The Court held that issuing a consolidated SCN for multiple financial years is permissible under CGST Act, with clarity on statutory grounds and appellate remedies. (!) (!) - Denial of cross-examination was considered justifiable given the factual nature of proceedings; however, the right to cross-examine is not unfettered and depends on circumstances. (!) (!) (!) (!) - The impugned order, though lengthy, was found to have considered the petitioner’s replies; non-consideration of replies was not established. (!) (!) - The petition was relegated to the statutory appellate remedy under Section 107 of the CGST Act; writ jurisdiction was not entertained given the availability of an efficacious alternative remedy. (!) (!) - The Appellate Authority cannot ordinarily remand to the Adjudicating Authority under Section 107(11), but there are circumstances where a writ petition may be entertained in exceptional cases (natural justice, vires, etc.). (!) (!) - The case acknowledges that the period-based/offense-based framing of ITC fraud can span multiple years; the language of Sections 74(3)-(4) and 73(3)-(4) contemplates period-wise notices, not strictly limited to a single financial year. (!) (!) (!) - The matter reiterates that where an alternative remedy exists, the writ petition should generally be refused, though exceptions apply for natural justice and other exceptional circumstances. (!) (!) - The decision preserves the petitioner’s right to file an appeal within the statutory timeline (by 31 August 2025) and clarifies the costs and disposition of pending applications. (!)
| Table of Content |
|---|
| 1. petitioner challenges impugned order in gst context. (Para 2 , 3 , 4 , 5 , 6 , 7) |
| 2. petitioner's arguments on violation of natural justice. (Para 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16) |
| 3. court's findings on fraudulent itc availed. (Para 18 , 19 , 20 , 21 , 22 , 24 , 25 , 26 , 27) |
| 4. details of penalties and orders confirmed by authorities. (Para 28 , 30 , 31 , 32) |
| 5. court's order regarding appeals and available remedies. (Para 66 , 67 , 68) |
JUDGMENT :
Prathiba M. Singh, J.
1. This hearing has been done through hybrid mode.
2. The present petition has been filed by the Petitioner- Ambika Traders through its proprietor, Mr. Gaurav Gupta under Articles 226 and 227 of the Constitution of India, inter alia, assailing the Order-in-Original bearing no. 74/ADJ-DGGI/DN/2024-25 dated 23rd January, 2025 (hereinafter, ‘impugned order’) passed by Respondent - Additional Commissioner, Adjudication (DGGSTI), CGST Delhi North. The present petition further assails the form DRC-07 dated 4th February, 2025 issued along with the impugned order.
I. Facts
3. The Petitioner is stated to be a firm dealing in metal scrap. It is stated to be a sole proprietorship of Mr. Gaurav Gupta and was registered under the erstwhile VAT regime. Thereafter, it migrated to the GST regime with GST No. 07AIAPG0187ElZQ.
4. On 3rd August, 2021, a search operation was carried out at the residential premises of the proprietor of the Petitioner as also at its sales office. Various records/files were resumed by the GST Department (hereinafter, ‘the Department’) from the said premises. The proprietor of the Petitioner, i.e. Mr. Gaurav Gupta was, thereafter, arrested on 4th August, 2021 by the Directorate General of GST Intelligence (hereinafter, ‘DGGI’), Meerut Zonal Unit. Mr. Gaurav Gupta was released on regular bail on 22nd October 2021.
5. A Show Cause Notice (hereinafter, ‘SCN’) was issued to the Petitioner on 29th May, 2023 along with form DRC-01 by the DGGI, Ghaziabad Regional Unit for the financial years 2017-2018, 2018-2019, 2019-2020, 2020-2021 and 2021-2022. Vide the said SCN, a demand of Rs. 83,76,32,528/- was raised against the Petitioner on the ground of alleged fraudulent availment and wrongful passing on of Input Tax Credit (hereinafter, ‘ITC’).
6. A detailed reply was filed by the Petitioner to the SCN on 19th December 2024. Thereafter, an additional reply to the SCN was filed by the Petitioner on 30th December 2024. The impugned order is stated to have been passed on 23rd January, 2025 along with form DRC-07 dated 4th February 2025, whereby a demand to the tune of Rs. 83,76,32,528/- was affirmed by the Respondent, along with a penalty of an equivalent amount. Further, a penalty to the tune of Rs. 75,000/- was imposed upon the proprietor of the Petitioner i.e. Mr. Gaurav Gupta.
7. A corrigendum to the aforesaid impugned order was also issued on 18th March, 2025, whereby the penalty imposed upon Mr. Gaurav Gupta was rectified, as the same had been erroneously recorded as Rs. 1,00,000/- instead of the correct amount of Rs. 75,000/-. The Petitioner vide the present petition challenges the issuance of the SCN and passing of the impugned order.
8. The Court heard this matter on 17th April, 2025. Mr. Rajesh Jain, ld. Counsel for the Petitioner and Mr. R. Ramachandran, ld. Sr. Standing Counsel for the Respondent made their submissions at length on the said date.
II. Submissions by the Parties
9. Mr. Rajesh Jain, ld. Counsel appearing for Petitioner submits that the reply to the SCN dated 19th December, 2024 as also the additional reply dated 30th December, 2024 filed by the Petitioner have not been considered by the Adjudicating Authority. It is the submission on behalf of the Petitioner that non-consideration of the said replies by the Adjudicating Authority amounts to gross violation of principles of natural justice.
10. Mr. Jain further submits that non-consideration of the reply is violative of the mandatory obligation upon the Adjudicating Authority in terms
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