JUDGMENT

Prathiba M. Singh, J.

1. This hearing has been done through hybrid mode.

CM APPLs.75278/2025 & 75279/2025 (for exemption)

2. Allowed, subject to all just exceptions. Applications are disposed of.

W.P.(C) 18204/2025 & CM APPL. 75277/2025 (for stay)

3. The present petition, inter alia, raises a challenge to the Order-in- Original dated 22^nd October, 2025 by which a demand to the tune of Rs.9,60,15,714/- crores has been confirmed against the Petitioner in respect of fake ITC, which is passed on/availed by the Petitioner.

4. There are various allegations in the petition against one Mr. Parag Garg who is stated to be the master mind of the operation and involved in incorporation of several firms and non-existent entities only to avail/pass on the Input Tax Credits (hereinafter “ITC”). Shri Parag Garg, who is the partner of the Petitioner firm, has in fact filed the present petition as well.

5. The Petitioner was engaged in the business of readymade garments and leather goods at Kirti Nagar, Delhi, which is stated to be still a running business. As per the impugned Order-in-Original, searches were conducted at various premises related to Mr. Parag Garg who is also a partner in various other firms with the same addresses.

6. The Order-in-Original sets out the factual background and the manner in which ITC was availed/passed on to various entities. The total demand raised in the impugned Order-in-Original against the Petitioner and other entities is as under:

“Order

(i) I confirm the demand of ITC availed/utilized in excess, amounting to CGST= Rs.4,80,07,857/-and SGST=Rs. 4,80,07,857/-collectively Rs. 9,60,15,714/- (Rupees Nine Crore Sixty Lakhs Fifteen Thousand Seven Hundred and Fourteen Only) and I hold it recoverable from the Noticee No. 1 under Section 74(1) of CGST Act, 2017 and corresponding provisions of SGST Act, 2017 read with Section 20 of IGST Act, 2017.

(ii) I confirm the demand and order for recovery of interest, from the Noticee No. 1, on the amount demanded above, under the provisions of Section 50 of the CGST Act, 2017 and SGST Act, 2017, read with relevant provisions of the IGST Act, 2017, from the due date till the date of actual payment.

(iii) I impose and order for recovery of penalty of CGST=Rs. 4,80,07,857/-and SGST = Rs. 4,80,07,857/- collectively Rs. 9,60,15,714/- (Rupees Nine Crore Sixty Lakhs Fifteen Thousand Seven Hundred and Fourteen Only), from the Noticee No. I, under Section 74(1) of the CGST Act, 2017 read with Section 122 of CGST Act, 2017, read with relevant provisions of the SGST Act 2017 and Section 20 of the IGST Act, 2017, for their various acts of omission and commission as discussed supra.

(iv) I refrain from imposing any another penalty on the Noticee No. 1 as Section 75 (13) of the CGST Act, 2017 clearly states that Where any penalty is imposed under section 73 or section 74 [or section 74A], no penalty for the same act or omission shall be imposed on the same person under any other provision of this Act.

(v) I order appropriation of Rs. 1,66,00,000/- paid vide DRC03 by the Noticee No. 1 during the investigation against the proposed demand.

(vi) I impose and order for recovery of penalty of CGST= Rs. 4,80,07,857/-and SGST = Rs. 4,80,07,857/- collectively Rs. 9,60,15,714/- (Rupees Nine Crore Sixty Lakhs Fifteen Thousand Seven Hundred and Fourteen Only), from the Noticee No. 2, under Section 122(1A) of the CGST Act, 2017, read with relevant provisions of the SGST Act 2017 and Section 20 of the IGST Act, 2017, for their various acts of omission and commission as discussed supra.

(vii) I impose and order for recovery of penalty equivalent to Rs. 50,000/- (CGST-Rs.25,000/- and SGST-Rs. 25,000/- ) from the Noticee 2, under section 122(3)(a) of CGST Act, 2017, read with relevant provisions of the SGST Act 2017 and Section 20 of the IGST Act, 2017, for their various acts of omission and commission as discussed supra.

(viii) I impose and order for recovery of penalty equivalent to amount as mentioned in column