Writ Dismissed as Petitioner Aided Ineligible ITC via Fraudulent Nexus | HC

Case Details: Mahesh Fabrinox (P.) Ltd v. Union of India - [2025] 174 taxmann.com 555 (Delhi)

Judiciary and Counsel Details

• Pratibha M. Singh & Rajneesh Kumar Gupta, JJ.
• N.K. Sharma & Kapil Gautam, Advs. for the Petitioner.
• Ms Neha Rastogi, SPC, Animesh Rastogi, Vibhav Singh, Shashank Pandey & Rajat Dubey, Advs., Akash Verma, Sr. SC, CBIC, Ms Aanchal Uppal, Adv. for the Respondent.

Facts of the Case

The petitioner was a private limited company which was served with a show cause notice for fraudulent availment of ITC. The petitioner filed a reply to the notice and a statement of the director was also recorded. However, the reply was not considered, and no personal hearing was granted before passing the order-in-original.

High Court Held

The Delhi Court held that the reply filed by the petitioner and the statement of the director showed that the stands taken by the petitioner were completely at variance. The director of the petitioner admitted that he met a person and agreed to purchase goods less invoices. He paid 6% of the total tax value against the said invoices. He was also aware of the fact that purchasing goods less invoices is illegal.

There was no infraction that show cause notice was duly served to the petitioner and personal hearing notices were provided. There was no arbitrary exercise by the department. Various persons and entities, including the petitioner, had either facilitated availment or availed ITC by entering into arrangements with the main proponent. Therefore, the writ petition was to be dismissed.