TaxTMI 
TaxTMI 
2025 (12) TMI 1661
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....reinafter 'SCN') dated 21st May, 2024. 3. The background giving rise to these petitions is that a DGARM report was generated in respect of verification of a firm called M/s Paramount Enterprises which is a sole proprietary concern of one Mr. Amit Kumar. The data of M/s Paramount Enterprises, which was downloaded from their GST portal revealed that there were several inward transactions and purchases made exclusively from M/s A to Z Corporation, a proprietary concern of one Mr. Kuldeep. A further analysis of the data revealed that purchases were made from different firms including M/s Suman Enterprise, M/s Bhumi Traders, M/s Naveen Enterprises, M/s Tota Ram, etc. 4. The further analysis of the accounts of M/s Paramount Enterprises and M/s Tota Ram showed that credit was extended by them to several recipients, including M/s VDR Colors and Chemicals Pvt. Ltd., A.V. Metals Marketing Pvt. Ltd. and M/s Surender Kumar Jain, who are the Petitioners in these three cases. 5. Physical verification was conducted at various premises, including those of the Petitioners. The statement of Mr. Surender Kumar Jain was recorded which was, however, thereafter retracted. The said statement rev....
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....lier firms, it has been determined that M/s VDR Colors and Chemicals Private Limited (GSTIN 07AAHCV1496PlZJ), M/s Surender Kumar Jain (GSTIN 07ADUPJ5030CIZQ), and M/s A.V. Metals Marketing Private Limited (07AASCA8813AIZP) have unlawfully availed fraudulent Input Tax Credit (ITC) amounting to Rs. 18,24,11,655/- from the non-existent firms. It is evident from the preceding paragraphs that these firms are under the operational control of Sh. Surender Kumar Jain, who serves as the proprietor or director in the aforementioned firms." 6. On the basis of the above allegations, the SCN was issued on 21st May, 2024 and the reply was directed to be filed. In response to the SCN, a reply was filed on 30th August, 2024 by the Petitioners in which the various pleas in respect of the applicable legal provisions and relevant judgments were raised. However, the stand of the Petitioners is that the impugned order was passed without affording a personal hearing to them. 7. In these petitions, notice was issued firstly on the ground that there was non-grant of personal hearing and on this aspect, instructions were to be obtained by the ld. Counsel for the Respondent. 8. With respect thereto....
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....r entities to whom the SCN was issued. The reply filed by the Petitioners is ambiguous, to say the least and fails to deal with the allegations in the SCN. 12. There can be no doubt that usually, personal hearing has to be given in such matters. However, the Petitioners were all along aware of the investigation proceedings that were going on. The SCN was duly served to them and a reply was also filed by the Petitioners. Thereafter, the Petitioners have also gone to the extent of retracting the statements which were made by them. Thus, there has been overall compliance of the principles of natural justice by the Department while adjudicating upon the SCN. Just because the Department is unable to show that the personal hearing notice was properly dispatched through the dispatch register or through speed post or through email, it would not mean that the Court has to disbelieve the part of the impugned order which states that personal hearing opportunities were duly provided. 13. Be that as it may, this Court has consistently taken the view that in cases involving fraudulent availment of ITC, ordinarily, the Court would not be inclined to exercise its writ jurisdiction. It is rou....
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.... which are available in terms of Section 107 of the CGST Act to pursue the grievance in regard to the action which has been adopted by the state in the present case" 15. Thereafter, this Court in W.P.(C) 5737/2025 titled Mukesh Kumar Garg v. Union of India & Ors. dealing with a similar case involving fraudulent availment of ITC had held as under: "11. The Court has considered the matter under Article 226 of the Constitution of India, which is an exercise of extraordinary writ jurisdiction. The allegations against the Petitioner in the impugned order are extremely serious in nature. They reveal the complex maze of transactions, which are alleged to have been carried out between various non-existent firms for the sake of enabling fraudulent availment of the ITC. 12. The entire concept of Input Tax Credit, as recognized under Section 16 of the CGST Act is for enabling businesses to get input tax on the goods and services which are manufactured/supplied by them in the chain of business transactions. The same is meant as an incentive for businesses who need not pay taxes on the inputs, which have already been taxed at the source itself. The said facility, which was ....
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.... forums, inasmuch as the same would also result in multiplicity of litigation and could also lead to contradictory findings of different Forums, Tribunals and Courts." 16. This position was also followed in M/s Sheetal and Sons & Ors. v. Union of India & Anr., 2025: DHC: 4057-DB. The relevant portion of the said decision read as under: "15. The Supreme Court in the decision in Civil Appeal No 5121 of 2021 titled 'The Assistant Commissioner of State Tax & Ors. v. M/s Commercial Steel Limited' discussed the maintainability of a writ petition under Article226. In the said decision, the Supreme Court reiterated the position that existence of an alternative remedy is not absolute bar to the maintainability of a writ petition, however, a writ petition under Article 226 can only be filed under exceptional circumstances.... XXXX 16. In view of the fact that the impugned order is an appealable order and the principles laid down in the abovementioned decision i.e. The Assistant Commissioner of State Tax & Ors. (Supra), the Petitioners are relegated to avail of the appellate remedy." 17. Recently, this Court in W.P.(C) 5815/2025titled M/s MHJ Metal Techs v. Ce....
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....number of firms and individuals, who were connected in the entire maze and not just the Petitioner. 15. The impugned order is an appealable order under Section 107 of the CGST Act. One of the co-noticees, who is also the son of the Petitioner i.e. Mr. Anuj Garg, has already appealed before the Appellate Authority. 16. Insofar as exercise of writ jurisdiction itself is concerned, it is the settled position that this jurisdiction ought not be exercised by the Court to support the unscrupulous litigants. 17. Moreover, when such transactions are entered into, a factual analysis would be required to be undertaken and the same cannot be decided in writ jurisdiction. The Court, in exercise of its writ jurisdiction, cannot adjudicate upon or ascertain the factual aspects pertaining to what was the role played by the Petitioner, whether the penalty imposed is justified or not, whether the same requires to be reduced proportionately in terms of the invoices raised by the Petitioner under his firm or whether penalty is liable to be imposed under Section 122(1) and Section 122(3) of the CGST Act. 18. The persons, who are involved in such transactions, cannot....