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IN THE HIGH COURT OF DELHI AT NEW DELHI
PRATHIBA M. SINGH, RAJNEESH KUMAR GUPTA
Ambika Traders Through Proprietor Gaurav Gupta – Appellant
Versus
Additional Commissioner, Adjudication Dggsti, CGST Delhi North – Respondent
What is the legality and scope of issuing a consolidated Show Cause Notice (SCN) for fraudulently availed ITC across multiple financial years under CGST Act? What are the standards and limits of natural justice, including cross-examination, in adjudication proceedings under CGST Act, and when may a writ petition be entertained instead of the statutory remedy? What remedies and timelines exist for challenging the impugned order—specifically the applicability of Section 107 appeal and the possibility of remand, and the maintainability of a writ petition given an effective appellate remedy?
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. (!)
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 4t
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