Order Date – 08 May 2025

Parties: M/s Reliable Trading Company Vs  Joint Director Directorate General of Goods and Services Tax Intelligence (DGGI) Zonal Unit, Meerut and 2 others

Facts –

• The Petitioner, M/s Reliable Trading Company, was issued a show-cause notice alleging fraudulent ITC claims using eight non-existent firms. It was found that these entities had no physical existence and were used only to route payments and claim credit without actual movement of goods.
• The department passed a final order confirming demand after rejecting the petitioner’s plea and denying cross-examination of witnesses, stating that their statements were not relied upon.

 Issue –

• Whether a writ petition is maintainable when an alternative appellate remedy is available?

Order –

• The Division Bench of Hon’ble High Court observed that the very fact that the input tax credit was availed based on fake supplies, to claim that the said fake supplies were disclosed and, therefore, Section 74 of the Act would not apply, is totally baseless. All the pleas raised and reply to the show cause notice having been dealt with by the adjudicating authority and the challenge laid to the said finding is only factual and does not fall in any of the parameters laid down by the Hon’ble Supreme Court wherein petitions under Article 226 of the Constitution of India can be entertained. Reference can be made to Jaipur Vidyut Vitran Nigam Limited and others vs. MB Power (Madhya Pradesh) Limited and others: (2024) 8 SCC 513 (paras 128 to 134).
• In the case of Ecom Gill Coffee Trading, it has, inter alia, been laid down by Hon’ble Supreme Court that ITC would be available to any dealer only after he discharges burden to establish actual receipt of goods. Mere production of invoices and payment to selling dealer by account payee cheque is not sufficient.
• Consequently, the petition filed by the petitioner is dismissed.