The Delhi High Court, in Bhupender Kumar v. Additional Commissioner Adjudication CGST Delhi North & Ors [W.P.(C) 9141/2025 & CM APPL. 38815/2025], delivered on July 07, 2025, dealt with a writ petition filed by Bhupender Kumar challenging a penalty order dated 01 February 2025 passed by the Central GST, Delhi North Commissionerate. The order imposed a penalty amounting to approximately Rs. 285 crore under Section 122(1A) of the CGST Act, 2017, along with additional penalties under Sections 122(3)(a), (d), (e) and Section 125 of the CGST Act.
Background:
Bhupender Kumar, a GST consultant, was implicated in a large-scale fake Input Tax Credit (ITC) fraud involving 63 fake firms, of which 54 were used for fraudulent ITC claims. The Directorate General of GST Intelligence (DGGI) had issued a show cause notice (SCN) on 8 March 2024, alleging that Kumar, along with others including one Sanjay Sehgal (the mastermind), facilitated creation of these firms and fraudulent ITC availment.
Key Findings:
- The petitioner admitted to assisting in the registration of bogus firms using fraudulent documents.
- The petitioner was aware of the fraudulent transactions and the fake nature of the firms.
- The petitioner did not file any reply to the SCN, which claimed he benefited from the transactions via commission.
- The court observed that such misuse of ITC facilities severely impacts the GST regime’s integrity.
- The Court declined to interfere in the writ petition, stating the matter involved complex factual analysis inappropriate for writ jurisdiction.
- The Court emphasized that the petitioner can challenge the order by filing an appeal under Section 107 of the CGST Act within one month, despite expiry of limitation, and the appeal shall be heard on merits.
- The Court also noted the retrospective applicability of Section 122(1A) from the date of the SCN and held the petitioner liable under this provision.
Conclusion:
The Delhi High Court refused to entertain the writ petition, upholding the penalties and observations against fraudulent ITC claims. The Court highlighted the serious nature of the fraud and the need to protect the GST framework from such exploitation. However, it allowed the petitioner an opportunity to seek appellate remedy.
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