Petitioner must file appeal with pre-deposit on fraudulent ITC claim; rectify DRC-07 errors within one week under Section 73.

The HC held that the petitioner must pursue the appellate remedy against the impugned order involving fraudulent ITC availment through non-existent firms. Typographical errors in the DRC-07 do not justify entertaining a writ petition. The petitioner was directed to rectify the DRC-07 within one week and file the appeal with pre-deposit within 30 days thereafter. Despite the limitation period having expired, the appeal will be heard on merits if filed within this extended timeframe. The appeal must specify the financial year 2018-19. The petition was disposed accordingly.

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ISSUES:

Whether fraudulent availment of Input Tax Credit (ITC) through bogus or non-existent firms constitutes a valid ground for raising demand and penalties under the Central Goods and Services Tax (CGST) Act.Whether a typographical error in the financial year mentioned in the demand notice (DRC-07) affects the validity of the adjudication order.Whether writ jurisdiction is appropriate for challenging orders involving complex factual disputes related to fraudulent ITC claims.The applicability of appellate remedies under Section 107 of the CGST Act in cases involving allegations of fraudulent ITC availment.

RULINGS / HOLDINGS:

The Court held that the impugned adjudication order raising demand for fraudulent availment of ITC through bogus invoices is valid and the Petitioner must avail of the appellate remedy; the order is an appealable order under Section 107 of the CGST Act.The typographical error in the financial year mentioned in the DRC-07 is not a sufficient ground to invalidate the order, as such errors can be rectified under Section 161 of the CGST Act.The Court held that writ petitions ordinarily are not to be entertained in cases involving fraudulent availment of ITC through bogus invoicing, as such matters require detailed factual analysis unsuitable for writ jurisdiction.The Petitioner is relegated to file an appeal within 30 days after rectification of the DRC-07, and the appeal shall not be dismissed on the ground of limitation if filed within this period with the pre-deposit.

RATIONALE:

The Court applied the statutory framework under the CGST Act, particularly Sections 16 (Input Tax Credit), 107 (Appeal), 122 (Penalty), and 161 (Rectification of orders), emphasizing the business-friendly intent of Section 16 while recognizing the misuse of ITC provisions through bogus invoicing.The Court relied on precedent establishing that writ jurisdiction is an extraordinary remedy and is generally inappropriate for adjudicating complex factual disputes involving fraudulent tax claims, to prevent multiplicity of litigation and contradictory findings.The decision reflects the doctrinal position that appeals under the CGST Act are the proper forum for contesting such orders, and that typographical errors in demand notices can be corrected without affecting substantive rights.

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