GST | Supreme Court Declines To Interfere With Delhi HC Refusal To Exercise Writ Jurisdiction In Fraudulent ITC Case

The Supreme Court has recently declined to interfere with a Delhi High Court order declining to entertain writ petitions challenging show cause notices alleging fraudulent availment of Input Tax Credit (ITC), holding that no good ground was made out for intervention under Article 136 of the Constitution.

In an order dated January 30, 2026, a bench of Justice Manoj Misra and Justice Manmohan dismissed the special leave petitions arising from the Delhi High Court's judgment of December 5, 2025, which had relegated the petitioners to the statutory appellate remedy.

The case arose from investigations that pointed to a network of exporters and suppliers who were operating from common addresses, with invoices signed by the same individual. They were allegedly engaged in goods-less transactions to fraudeuently avil ITC.

Based on intelligence gathered by the Directorate General of GST Intelligence, authorities accused the entities of fraudulently availing Input Tax Credit through non-existent, non-functional, and bogus firms.

Aggrieved, the bunch of petitioners challenged both the show cause notices and the orders-in-original. The court, however, noted that no reply on merits had been filed to the show cause notices. They also failed to attend scheduled personal hearings, despite being aware of the proceedings.

In its judgment, the Delhi High Court observed that the allegations raised complex factual issues involving multiple interconnected entities, their promoters, addresses, and transactional trails, which could not be examined in writ proceedings.

Relying on the Supreme Court's ruling in Commercial Steel and a consistent line of its own decisions,the High Court reiterated that in cases involving alleged fraudulent availment of ITC, writ jurisdiction is ordinarily not exercised where an effective statutory appellate remedy is available.

While disposing of the writ petitions, the High Court granted liberty to the petitioners to pursue the appellate remedy. It directed that if appeals were filed with the mandatory pre-deposit by February 1, 2026, they would not be rejected on the ground of limitation.

For Petitioner: Advocates Ramakant Gaur, Sneha Arya, Harshi Gaur, Meenakshi Sahu, Roopini Nandam, Sobiya Manzoor with AOR Ajay Choudhary