Court emphasizes that writ jurisdiction under Article 226 is not a substitute for statutory remedy where disputed facts and detailed adjudication are involved
In a significant judgment dated August 21, 2026, the Delhi High Court, in a Division Bench comprising Justices Anil Kshetarpal and Shail Jain, refused to entertain writ petitions filed by M/s Vleadit and M/s Rahul and Sons HUF challenging a common Order-in-Original issued by the Additional Commissioner, CGST Delhi West. The order, passed against 629 firms and individuals, implicated the petitioners in a large-scale racket involving issuance and utilization of fake GST invoices to claim ineligible input tax credit.
The dispute arose following a search operation conducted on October 9, 2024, at the premises of key accused persons, including Vikrant Singhal, Sachin Singhal, and Pradeep Kumar, who were alleged to have orchestrated the creation of 107 fake firms. During the search, documents, electronic data, and cash exceeding Rs. 22 lakh were seized. The Department found that these fake invoices were circulated among numerous firms, including the petitioners, to fraudulently claim GST credits.
The petitioners contended that no specific role was assigned to them in the Show Cause Notice (SCN) dated June 30, 2025, and their detailed replies to the SCN were disregarded by the Adjudicating Authority. They argued that their involvement was limited to a single transaction with one of the companies and that the consolidated order failed to consider their individual circumstances.
However, the Court highlighted that the Impugned Order-in-Original was a comprehensive adjudication running nearly 1,880 pages, reflecting extensive examination of evidence, statements, and accounts. The Court noted that the principles of natural justice require the Adjudicating Authority to consider the replies to the SCN and pass a reasoned order, but any alleged failure in this regard should be challenged through the statutory appellate process rather than via writ petitions.
Relying on the Supreme Court precedent in M/s ASP Traders v. State of Uttar Pradesh, the Court observed that writ jurisdiction under Article 226 of the Constitution of India is not appropriate when efficacious statutory remedies exist and the issues involve complex and disputed facts. The Court emphasized that permitting writ petitions in such matters would undermine the appellate framework designed to handle detailed factual disputes.
Consequently, the Delhi High Court declined to exercise its writ jurisdiction, directing the petitioners to avail the statutory remedy of appeal. The writ petitions and pending applications were disposed of accordingly.
This decision reinforces the principle that while natural justice is paramount, procedural safeguards and statutory remedies must be respected, especially in complex tax litigation involving multiple parties and voluminous evidence.
Bottom Line:
Writ jurisdiction under Article 226 of the Constitution of India should not be exercised to bypass the statutory remedy of appeal, particularly in cases involving detailed and disputed questions of fact.
Statutory provision(s):
Article 226, Constitution of India; Central Goods and Services Tax Act (implied from context, though not explicitly cited in judgment)
Summary for readers:
The Delhi High Court has upheld the procedural sanctity of the statutory appellate process in GST-related disputes involving alleged fraud and fake invoices. Petitioners embroiled in a large racket must first exhaust appeals rather than seek direct writ relief, ensuring a thorough fact-based examination by the designated appellate authorities.
M/s Vleadit v. Additional Commissioner, CGST Delhi West, (Delhi)(DB) : Law Finder Doc Id # 2971284
