Appeal Required for ITC Penalty on Goods-Less Invoices | HC

Case Details: SS Enterprises vs. Commissioner Central Tax - [2025] 174 taxmann.com 717 (Delhi)

Judiciary and Counsel Details

• Pratibha M. Singh & Rajneesh Kumar Gupta, JJ.
• Ms Shivani Sethi, Adv. for the Petitioner.
• Aakarsh Srivastava, Senior Standing Counsel, Anand Pandey & Ms Anugya Gupta, Advs. for the Respondent.

Facts of the Case

The petitioner-assessee challenged an original order imposing a penalty for availing of fraudulent input tax credit (ITC) based on goods-less invoices issued by two allegedly fake and fraudulent firms. The petitioner contended that it never received the notice, was not connected to the owners of the fake firms, and was denied three personal hearings. The Revenue issued a penalty order against the petitioner under Section 75(5) of the CGST Act. The matter was brought before the Delhi High Court seeking writ relief against the penalty imposition.

High Court Held

The Hon’ble Delhi High Court observed that the petitioner’s own averments belied the claim of non-receipt of personal hearing notices. The Court clarified that Section 75(5) of CGST contemplates a maximum of three adjournments but does not mandate three hearings. The Court noted that the impugned penalty order was appealable under Section 107 of the CGST Act and thus directed the petitioner to pursue remedy through filing an appeal before the appropriate appellate authority. Further, the Court emphasised that the documents relied upon by the Department of Revenue must be made available to the petitioner during the appeal process.