Judicial Corner: Writ against penalty for fraudulent ITC under second GSTIN denied for assessee’s negligence directed to pursue appeal remedy (02.09.2025)

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Writ against penalty for fraudulent ITC under second GSTIN denied for assessee’s negligence directed to pursue appeal remedy {Laxmi Collection V/s Addt. Comm, CGST, Delhi West – (2025) 33 Centax 192 (Del.)}

 

Facts

  • On migration to GST, assessee was allotted two GSTINs.
  • Commissioner imposed penalty for fraudulent ITC under the second GSTIN.
  • Assessee argued that:
    • The second GSTIN was misused by someone else.
    • An FIR was filed (30-09-2019) for blocking the GSTIN.
    • He was illiterate, and his accountant managed the accounts.

Issue

 

Whether the assessee could challenge the penalty order directly through writ jurisdiction, citing misuse of GSTIN by others.

 

Held

  • Assessee was negligent in not filing an appeal against the order-in-original within time.
  • Duty lies on assessee to ensure his identity/GSTIN is not misused.
  • Determination of alleged misuse and fraud involves factual inquiry, not suitable for writ jurisdiction.
  • Hence, writ petition was dismissed, and assessee directed to pursue appeal remedy under:
    • Sec. 122 r/w Sec. 73, CGST Act, 2017
    • Sec. 20, IGST Act, 2017