High Court Declines Writ Relief in Fake ITC Case, Imposes Rs. 1 Lakh Exemplary Costs

M/s J.K. Enterprises challenged a show cause notice dated 07.08.2024 and adjudication order dated 30.01.2025 passed under the CGST Act, arising from a large investigation involving 575 noticees accused of fraudulently availing Rs. 13.16 crore of ITC through 16 fake firms. The petitioner was alleged to have availed of fake ITC across multiple financial years.

A consolidated show cause notice was issued to all noticees. While several parties filed replies, the petitioner neither responded nor appeared for personal hearings, despite notices being sent to the registered email address. The adjudicating authority thereafter confirmed tax, interest, and penalty. Instead of filing a statutory appeal under Section 107, the petitioner invoked writ jurisdiction, alleging non-service of hearing notices, invalidity of a consolidated SCN, lack of a year-wise breakup, and absence of jurisdiction.

Issue Raised: Whether the High Court should exercise writ jurisdiction despite the availability of an efficacious statutory appellate remedy in a case involving alleged fraudulent ITC.

HC’s Decision: The High Court dismissed the writ petition with costs of Rs. 1,00,000. It held that hearing notices were duly served and the plea of non-service was false. Relying on Ambika Traders, the Court reaffirmed that consolidated show cause notices covering multiple years are permissible under Sections 73 and 74 of the CGST Act.

The Court rejected the jurisdictional challenge, observing that centralized adjudication in large, multi-noticee investigations is legally valid. Emphasising the seriousness of fake ITC cases and the need for factual adjudication, the Court declined to entertain the writ petition and deprecated attempts to bypass the statutory appellate mechanism.

The Court granted limited liberty to file a statutory appeal under Section 107 by 15.01.2026 with the requisite pre-deposit, directing that it be decided on merits and not rejected on limitation.

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