W.P.(C)/4266/2025 of MS ASHISH METALS Vs UOI & ANR

*IN THE HIGH COURT OF DELHI AT NEW DELHI+W.P.(C) 4266/2025 & CM APPL.19712/2025

MS ASHISH METALS.....PetitionerThrough:Mr. Sunil Upadhyay, Ms. Suchetan,Mr. Gourav Agarwal and Mr. HarishKumar Gaur, Advs.

versus

UOI & ANR......RespondentsThrough:Mr. Nune Balraj, SPC for UOI with Ms.Meghna Rao and Mr. Harshit Goel,Advs. for R-1.Mr. Pranay Mohan Govil, Sr. StandingCounsel.

CORAM:

JUSTICE PRATHIBA M. SINGHJUSTICE RAJNEESH KUMAR GUPTAO R R%03.04.2025

1.This hearing has been done through hybrid mode.

2.This is petition under Article 226 of the Constitution of Indiachallenging the impugned Order-in-Appeal dated 10[th]December, 2024

(‘OIA’).

3.A Show Cause Notice dated 22nd September, 2022 (‘SCN’) was issuedto the Petitioner by Respondent No.2/Department on the ground that thePetitioner had availed excess Input Tax Credit (‘ITC’) to the tune ofRs.79,76,771.52/-. The case of the Petitioner is that it had not availed any ITCand it was only due to typographical error that the said credit was shown ashaving been availed of in the year 2018-19. The SCN was adjudicated and theOrder-in-Original dated 1[st]February, 2024 was passed wherein the demand of

Rs.79,76,771.52/- was confirmed against the Petitioner along with the

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applicable interest and penalty of Rs.7,97,677/-. The operative portion of theorder reads as under:

“ORDER

i. I confirm the demand of Rs.79,76,771.52/- (RupeesSeventy Nine Lakhs Seventy Six Thousand SevenHundred Seventy One and Fifty Two Paise only)(IGST: Rs.0/-, CGST: Rs.3988385.76/- & SGST:Rs.3988385.76/-) towards excess availment of ITC andorder that the same be recovered from M/s ASHISHMETALS,LegalName:ASHISHJAIN(GSTIN:07ARUPJ4528P1ZX) along with applicable interestunder Section 73(1) and Section 50 of the CGST Act,2017 / DGST Act, 2017 respectively, read with Section20 of IGST Act, 2017 read with Rule 121 of the CGSTRules, 2017 (as amended).

ii. I impose penalty of Rs.7,97,677/- (Rupees SevenLakhs Ninety-Seven Thousand Six Hundred andSeventy-Seven only) on M/s ASHISH METALS, LegalName: ASHISH JAIN (GSTIN: 07ARUPJ4528P1ZX)under Section 122 of the CGST / DGST Act, 2017 readwith Section 73(9) of the CGST /DGST Act, 2017 andSection 20 of IGST Act, 2017.”

4.ThisorderwaschallengedbythePetitionerbeforetheCommissioner(Appeals) who has rejected it vide the impugned order dated 10[th]December, 2024. Thus, the present petition has been filed.

5.The Petitioner’s submissions are two-fold. Firstly, the learned Counselfor the Petitioner submits that the said ITC was never availed of, though thesame was reflected in the statement in the following manner.

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Page 3 of 7

This is digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.The Order is downloaded from the DHC Server on 09/04/2025 at 14:41:35

6.AccordingtothePetitioner,theirCharteredAccountanthadinadvertently committed an error in entering the values of ITC availed for themonth of August 2018 which reflects to the tune of Rs. 46,02,300/- (CGST)and Rs. 46,02,300/- (SGST). This error was sought to be rectified by thePetitioner, though belatedly in the year 2020.

7.Ld.CounselforthePetitionerfurthersubmitsthattheRespondent/Department, being conscious of the fact that such errors canhappen in filing the returns, had issued Circular No 26/26/2017 dated 29[th]December, 2017. The circular allowed the assessees who had not utilized thecredit for offsetting their liabilities, to edit the entered values by using the edit

facility. The relevant portion of the circular reads as under:

8.However, in the present case, the grievance of the Petitioner is that thesaid facility was not made available to it and the SCN dated 22nd September,2022 was issued against the Petitioner.

9.On behalf of the Respondent, it is submitted that the Department, videCircular No. 224/18/2024 dated 11[th]July, 2024 (hereinafter ‘Guidelines’), hasissued Guidelines for recovery of outstanding dues in cases where the first

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appeal has been disposed of, till the Appellate Tribunal comes into operation.The impugned OIA is an appealable order passed in first appeal. He submitsthat in terms of paragraphs 4 and 5 of the said Circular, if the Petitionerdeposits 10% of the amount, the recovery would be stayed.

10.Heard the Counsels for the parties. It is noticed that the proceedings havegone on for long time in respect of the SCN and there are detailed orderspassed by the Adjudicating Authority as also by the Appellate Authority. Thecase of the Petitioner is that the SCN was adjudicated ex-parte as no noticewas received by the Petitioner. However, in the appeal the Petitioner was givenan opportunity to challenge the Order in Original. The impugned order is anappealable order under Section 112 of the CGST Act.

11.The Department has acknowledged the lack of an appellate tribunal andhas thus published the above Guidelines, which provide as under:

In order to facilitate the taxpayers to make the payment of theamount of pre-deposit as per sub-section (8) of section 112 ofCGST Act, and to avail the benefit of stay from recovery of theremaining amount of confirmed demand per sub-section (9) ofsection 112 of CGST Act,it is hereby clarified that cases wherethe taxpayer decides to file an appeal against the order of theappellate authority and wants to make the payment of the--amount of predeposit as per subsection (8) of section 112 ofCGST Act, he can make the payment of an amount equal to the-amount of predeposit by navigating to Services Ledgers>>Payment towards demand, from his dashboard.The taxpayerwould navigated to Electronic Liability Register (ELL) Part-II inwhich he can select the order, out of the outstanding demandorders, against which payment is intended to be made. Theamount so paid would be mapped against the selected order anddemand amount would be reduced in the balance liability theaforesaid register.The said amount deposited by the taxpayer-will be adjusted against the amount of predeposit required tobe deposited at the time of filing appeal before the Appellate

Tribunal.

5.The tax payer also needs to file an undertaking/declarationwith the jurisdictional proper officer that he will file appealagainst the said order of the appellate authority before theAppellate Tribunal, as and when it comes into operation, withinthe timelines mentioned in section 112 of the CGST Act readwith Central Goods and Services Tax (Ninth Removal ofDifficulties) Order, 2019 dated 03.12.2019. On providing thesaid undertaking and on payment of an amount equal to the-amount of predeposit as per the procedure mentioned in para4 above, the recovery of the remaining amount of confirmeddemand as per the order of the appellate authority will stand-stayed as per provisions of subsection (9) of section 112 ofCGST Act.

12.Considering the above position and the following circumstances:

(i)ex-parte nature of the Order in Original

(ii)the option to edit being provided vide the Circular No 26/26/2017dated 29[th]December, 2017,dated 29[th]December, 2017,

this Court is of the opinion that the Petitioner ought to be relegated to followthe procedure prescribed in paragraphs 4 & 5 of the above Guidelines bymaking deposit of 10% of the demanded amount.

13.Accordingly, the Petitioner is given time of eight weeks to make the saidpre-deposit in terms of paragraph 4 of the Guidelines. Upon the said pre-deposit being made, as per the Guidelines, the demand which has beenconfirmed by the Appellate Authority, shall remain stayed until theconstitution of the GST Appellate Tribunal.Upon the Appellate Tribunalbeing notified, the Petitioner is free to file its appeal by following theprescribed procedure.

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14.The present petition is disposed of in the above terms. All pendingapplications, if any, are also disposed of.

PRATHIBA M. SINGH, J.

APRIL 3, 2025/dk/Ar.

RAJNEESH KUMAR GUPTA, J.

W.P.(C) 4266/2025