The Hon’ble Delhi High Court in Treco Wire India Private Limited v. Additional Commissioner Central Tax Delhi North & Ors. [W.P.(C) 583/2026 dated September 29, 2026] set aside the Order-in-Original confirming a demand of Input Tax Credit (“ITC”) of Rs. 3,34,21,261/- along with interest and an equal penalty under Section 74 of the Central Goods and Services Tax Act, 2017 (“the CGST Act”), raised on the ground that the registrations of the suppliers had been cancelled retrospectively, and held that an order under Section 74 must disclose the factual foundation of the demand, namely the identity of the suppliers, the invoices, the dates of cancellation and the ITC attributable to each supplier, and must record specific findings of fraud, wilful misstatement or suppression of facts, since mere reproduction of the audit objection and the statutory language does not demonstrate application of mind. The Hon’ble Court, however, rejected the challenge to the constitutional validity of Section 16(2)(c) of the CGST Act in view of the judgment of the Hon’ble Supreme Court and remanded the matter for fresh adjudication.
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