In Case Of Delayed Uploading of Order Taxpayer May Approach to
Appellate Authorities for Remedies -Bharat International vs. Additional
Commissioner, CGST Delhi North
Introduction
One of the recurring
issues under the Goods and Services Tax (GST) regime has been the alleged wrongful
availment of Input Tax Credit (ITC) through fake or goods-less invoices.
Investigations across the country have revealed that several taxpayers either knowingly
or unknowingly availed credit on the strength of invoices issued by
non-existent or suspicious firms.
The case of Bharat
International v. Additional Commissioner, CGST Delhi North & Ors.
decided by the Delhi High Court on 4th August 2025, is a significant
ruling in this regard. It raises questions of natural justice, limitation,
and appellate remedies while dealing with large-scale ITC fraud
allegations.
Case
Details
- Case Title:
Bharat International v. Additional Commissioner, CGST Delhi North &
Ors.
- Court:
High Court of Delhi at New Delhi
- Case No.:
W.P.(C) 11519/2025 & CM APPL. 47159/2025
- Date of Order:
04 August 2025
- Nature of Petition:
Writ petition under Article 226 challenging Order-in-Original dated 4th
February 2025 imposing demand of ₹5,64,082/- on grounds of wrongful
ITC availment.
- Statutory Reference:
Section 107 of the CGST Act, 2017 (Appeals), provisions relating to ITC
under Sections 16–17, and natural justice principles under Section 75.
Summary of the Case
The petitioner, Bharat
International, was one of the entities implicated in a massive alleged ITC
fraud involving 61 recipient entities and five non-existent supplier
firms. The Department alleged that Bharat International availed ITC on
goods-less invoices issued by firms such as City Overseas, Delhi Trading,
Global Enterprises, Royal International, and Yamuna International.
An Order-in-Original
dated 4th February 2025 confirmed a demand of ₹5,64,082/- against
the petitioner. Although the petitioner had already deposited ₹10,57,724/-
under protest, it challenged the order before the Delhi High Court alleging
denial of natural justice and delay in uploading of the order.
The Court, however, held
that there was no violation of natural justice, since multiple hearing
opportunities were given. Nevertheless, considering that the petitioner had
already deposited substantial sums, the Court directed the petitioner to pursue
its remedy by way of appeal under Section 107, and ensured that the
appeal would not be dismissed on limitation grounds if filed by 31 August
2025.
Facts of
the Case
1. Background
of Investigation: The CGST Delhi North Commissionerate
initiated investigations into widespread ITC fraud allegedly facilitated by five
non-existent firms:
§ City
Overseas
§ Delhi
Trading
§ Global
Enterprises
§ Royal
International
§ Yamuna
International
2. Magnitude
of ITC Availment: According to the Department, 161
entities had availed inadmissible ITC worth ₹12.90 crores through
invoices issued by the above non-existent firms.
3. Voluntary
Deposits by Several Entities: During investigation, 47
entities voluntarily reversed ITC amounting to ₹2.43 crores,
including Bharat International, which deposited ₹10,57,724/- under protest.
4. Show
Cause Notice
o A
detailed SCN dated 4th August 2024 was issued to multiple noticees,
including the petitioner. Bharat International filed its reply on 4th
November 2024.
5. Adjudication:
The Adjudicating Authority passed an Order-in-Original on 4th February 2025,
confirming demand of ₹5,64,082/- against Bharat International. The
Department claimed that personal hearings were scheduled on 8th November
2024, 6th December 2024, and 9th December 2024, but the petitioner failed
to appear.
6. Challenge
before High Court: The petitioner challenged the OIO before
the High Court on grounds of denial of natural justice and delay in uploading
of the order.
Submissions
by the Petitioner
The petitioner, through
counsel, raised the following contentions:
1. Denial
of Natural Justice
o Although
a reply to the SCN was filed on 4th November 2024, the impugned order
was passed without proper consideration of submissions.
o No
meaningful opportunity of personal hearing was granted, and the petitioner’s
reply was brushed aside.
2. Deposit
under Protest
o The
petitioner had already deposited ₹10,57,724/-, more than the amount
demanded, but the adjudicating authority still passed an adverse order.
3. Delay
in Uploading Order
o Though
the order was dated 4th February 2025, it was uploaded on the GST portal
only on 12th February 2025. This delay, according to the petitioner,
rendered the order beyond limitation.
4. Relief
Sought
o Quashing
of the impugned order dated 4th February 2025.
o A
declaration that the deposit already made covers the disputed liability.
Submissions
by the Respondent
The Department countered
the petitioner’s claims with the following arguments:
1. Adequate
Opportunity Provided: Multiple hearings were scheduled (8th
November, 6th December, and 9th December 2024). Several other noticees availed
the opportunity, but the petitioner chose not to appear.
2. Valid
Investigation Findings: The investigation clearly
established that goods-less invoices were issued by five non-existent firms and
that petitioner was one of the beneficiaries.
3. No
Violation of Natural Justice: Since sufficient
opportunities were given, the petitioner cannot allege violation of natural
justice merely because it failed to participate.
4. Appellate
Remedy Available: The order-in-original is appealable
under Section 107 of the CGST Act, 2017. Instead of approaching the High
Court, the petitioner should exhaust statutory remedies.
Observations
of the Court
The Division Bench of the
Delhi High Court made the following observations:
1. On
Natural Justice: The Court noted that hearings were
indeed scheduled and many entities participated. The petitioner’s absence
cannot be blamed on the Department. Therefore, there was no violation of
natural justice.
2. On
Deposits Made: Since the petitioner had already
deposited ₹10,57,724/- under protest, more than the confirmed demand,
this was a fit case to allow the petitioner to pursue appellate remedies.
3. On
Limitation and Uploading Delay: The Court noted the
petitioner’s contention regarding late uploading (12 February 2025). However,
instead of deciding the issue in writ jurisdiction, the Court permitted the
petitioner to raise this argument before the appellate authority.
4. On
Writ Jurisdiction: Since the statute provides a specific
appellate remedy, the Court declined to entertain the writ petition on merits
and directed the petitioner to avail the appeal route.
Judgment
The High Court disposed
of the writ petition with the following directions:
1. The
petitioner may file an appeal under Section 107 of the CGST Act, 2017
against the impugned order.
2. If
such appeal is filed on or before 31 August 2025, it shall not be
dismissed on limitation grounds and must be adjudicated on merits.
3. The
petitioner may also raise the issue of delay in uploading the order
before the appellate authority.
4. Pending
applications were disposed of.
Conclusion
The case of Bharat
International v. Additional Commissioner, CGST Delhi North reinforces some
important principles of GST litigation:
- Natural Justice:
Mere non-appearance by a taxpayer cannot be equated with denial of natural
justice if sufficient opportunities were provided.
- Deposits under Protest:
Payments made during investigation safeguard taxpayers’ rights, but
liability must still be adjudicated through statutory procedures.
- Statutory Remedies Preferred:
High Courts are reluctant to entertain writ petitions when appellate
remedies are available.
- Equitable Relief:
Courts may ensure that appeals are heard on merits by protecting taxpayers
against limitation objections.
This judgment reflects
the judiciary’s balanced approach: while ensuring that fraud in ITC claims is
not condoned, it also protects taxpayers’ rights to appeal and contest findings
on merits. For businesses, the message is clear — participate in
adjudication proceedings actively, but if missed, appellate forums remain
open, subject to conditions.
Disclaimer: All the Information is based on the notification, circular advisory and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
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