Writ Jurisdiction Denied in Fraudulent ITC Claims; Appeal Allowed Under Section 107 CGST Act by August 31, 2025

The HC held that writ jurisdiction is generally not available in cases involving fraudulent availment of ITC due to the impact on the exchequer and GST regime. Given allegations against the petitioner concerning fraudulent ITC claims by fake firms, the writ petition was not entertained. The court acknowledged the petitioner's contention regarding inadequate notice but noted some parties had appeared. The petitioner was granted an opportunity to file an appeal under Section 107 of the CGST Act by 31 August 2025 with the requisite pre-deposit. If filed timely, the appeal would not be dismissed on limitation grounds and would be heard on merits. The petition was disposed of accordingly.

---

---

ISSUES:

Whether writ jurisdiction under Article 226 can be exercised in cases involving allegations of fraudulent availment of Input Tax Credit (ITC) under the CGST Act.Whether the existence of alternate statutory remedy under Section 107 of the CGST Act bars the maintainability of a writ petition challenging demands and penalties for fraudulent ITC.Whether principles of natural justice were complied with in the impugned order and if non-consideration of petitioner's reply affects the legality of the order.Whether an opportunity to file an appeal under Section 107 of the CGST Act should be granted despite the writ petition being dismissed.

RULINGS / HOLDINGS:

Writ jurisdiction ought not to be exercised in cases involving fraudulent availment of ITC, considering the burden on the exchequer and the impact on the GST regime, as such matters require detailed factual analysis beyond the scope of writ proceedings.The existence of an alternate remedy under Section 107 of the CGST Act generally bars writ petitions, except in exceptional circumstances such as breach of fundamental rights, violation of natural justice, excess of jurisdiction, or challenge to the vires of the statute, none of which were established in the present case.The impugned order complied with the basic requirements of principles of natural justice by providing opportunities for personal hearing, and the non-consideration of the petitioner's reply does not vitiate the order as the petitioner failed to appear for the hearings.The petitioner is granted an opportunity to file an appeal under Section 107 of the CGST Act within a stipulated time with the relevant pre-deposit, and such appeal shall be adjudicated on merits without dismissal on limitation grounds.

RATIONALE:

The Court applied the legal framework under Article 226 of the Constitution and the provisions of the Central Goods and Services Tax Act, 2017, particularly Sections 16 (Input Tax Credit), 107 (Appeal), and 122 (Penalty).Precedent was relied upon where writ jurisdiction was declined in cases of fraudulent ITC to prevent misuse of the GST regime and avoid multiplicity of litigation and contradictory findings across forums.The Court emphasized that factual disputes and complex transactions require adjudication by the statutory appellate authority rather than through writ proceedings.Reference was made to Supreme Court authority holding that writ petitions are maintainable only under exceptional circumstances when alternate statutory remedies exist.The Court noted compliance with principles of natural justice through adequate notice and opportunity for personal hearing, and that ex-parte decisions are permissible where parties are non-responsive.No dissent or doctrinal shift was indicated; the judgment follows established jurisprudence restricting writ intervention in GST fraud matters.

---