The Delhi High Court, in M/s VLeadIT & Anr. v. Additional Commissioner, CGST Delhi West & Ors. and the connected matter M/s Rahul and Sons HUF & Anr. v. Additional Commissioner, CGST Delhi West & Ors., declined to exercise its writ jurisdiction against a common Order-in-Original concerning alleged fake invoices and ineligible input tax credit. The Court held that the disputed factual questions raised by the petitioners could appropriately be examined in the statutory appellate proceedings.
Background
The writ petitions challenged an Order-in-Original dated 26 December 2025, subsequently rectified on 25 June 2026. The adjudication order was a common order concerning 629 firms and individuals.
The proceedings arose from information received by the Department alleging that certain persons were arranging invoices without actual supply of goods. Following a search conducted on 9 October 2024, documents, electronic data and other material were seized. The Department alleged large-scale issuance and availment of fake purchase and sale invoices through different firms.
The petitioners figured at Serial Nos. 616 and 618 respectively in the common Order-in-Original.
Petitioners’ Contentions
The petitioners contended that no specific role had been attributed to them in the show cause notice dated 30 June 2025. They further argued that their detailed replies to the show cause notice had not been properly considered while passing the Order-in-Original.
It was also submitted that they were not involved in the alleged racket and that their cases required separate consideration, particularly because they were alleged to have entered into only a single transaction with M/s Sahuwala Exports Pvt. Ltd.
Reliance was placed on M/s ASP Traders v. State of Uttar Pradesh & Ors., where the requirement of considering a taxpayer’s reply and passing a reasoned order was emphasized.
Delhi High Court’s Findings
The High Court distinguished the decision in ASP Traders, observing that it concerned an order against an individual assessee, whereas the present matter involved a consolidated adjudication order against more than 600 firms and individuals.
The Court noted that determining whether the petitioners’ replies had been duly considered and examining the precise role attributable to them involved factual issues that could appropriately be considered by the appellate authority.
The Court also observed that the adjudication proceedings involved statements of several persons and examination of accounts, invoices and transactions of numerous firms. The adjudicating authority had recorded findings regarding an alleged arrangement involving the creation of 107 fake firms for availing ineligible input tax credit.
In these circumstances, the Court held that where detailed and disputed questions of fact required examination, permitting the petitioners to bypass the efficacious statutory remedy of appeal by invoking writ jurisdiction would not be appropriate.
Decision
The Delhi High Court declined to exercise writ jurisdiction and relegated the petitioners to their statutory remedy of appeal against the Order-in-Original.
Accordingly, both writ petitions and the pending applications were disposed of.
Key Takeaway
The judgment reiterates that the existence of an efficacious statutory appellate remedy assumes particular importance where a GST dispute involves extensive factual examination. Allegations relating to non-consideration of replies, attribution of individual roles and disputed transactions may be examined by the appellate authority, and the High Court may decline writ interference when such questions require detailed factual adjudication.