HC Refuses to Interfere in ITC Fraud Proceedings; Allows to File Delayed GST Appeal

A proprietor of Yamini Bearing Enterprises approached the High Court challenging an adjudication order dated 1 February 2025 and the relating DRC-07 dated 18 February 2025. The order was passed in a large investigation involving alleged fraudulent ITC availment linked to multiple non-existent entities. The petitioner appeared as one of the recipients of ITC traced to three dubious suppliers, resulting in an alleged wrongful credit of Rs. 4,39,036 under CGST and SGST.

Issue Before HC: Whether the High Court should quash the adjudication order and DRC-07 on the ground of alleged non-service of the SCN and a financial-year discrepancy when the case concerns alleged fraudulent ITC and is otherwise appealable under Section 107 of the CGST Act.

HC’s Order: The Court held that it would not exercise writ jurisdiction in matters involving alleged fraudulent ITC availment, especially when the proceedings include a complex set of transactions and factual determinations that must be evaluated by the appellate authority. The Bench reiterated that writ courts should not interfere where an effective alternative remedy exists and no exceptional circumstances are shown. The Court accepted that an SCN had indeed been emailed and uploaded, and the financial-year mismatch in DRC-07 was only a harmless clerical error.

The Court permitted the petitioner to file a statutory appeal under Section 107. It granted time until 15 January 2026 to file the appeal along with the requisite pre-deposit, directing that such appeal shall not be rejected as time-barred and must be decided on merits. The writ petition and pending applications were disposed of accordingly.

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