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Tax & Customs LawDelhi High Court

M/s A.G. Enterprises vs. Union of India & Anr.

Writ Petition (Civil) · CNR No. DLHC010414842025Decided 1 Oct 2026New Delhi Bench
W.P.(C) 9406/2025CNR: DLHC010414842025
Justice Anil Kshetarpal · Justice Bharat Parashar

Background

The petitioner is a trading proprietorship dealing in machines, screws and scaffolding equipment. It challenged a Demand-cum-Show Cause Notice dated 06.06.2024 and an Order-in-Original dated 12.02.2025 under Section 74 of the CGST Act, which required it to reverse input tax credit of about Rs 47.93 lakh with interest and penalty. The proceedings arose from an investigation into another trader's GSTIN. The petitioner argued that the proceedings were barred under Section 6(2)(b) because the State authorities had acted first, that it was not heard, and that the order went beyond the notice.

Decision Breakdown

The High Court dismissed the writ petition. It held that the questions raised, such as whether the goods were actually received, the admissibility of the credit, and the correctness of the demand, involved disputed facts that the statutory appellate authority is designed to decide. Because the petitioner had an efficacious statutory remedy against the Order-in-Original, the Court would not assume the role of appellate authority. It expressly left open the Section 6(2)(b) and limitation questions for the competent authority, and expressed no final view on them.

Lesson Learnt

A tax demand that has a statutory appeal route should generally be challenged there, not by writ petition, and all defences, including jurisdictional ones, can be raised in that appeal. Keeping timelines and records of goods received matters in input tax credit disputes.

M/s A.G. Enterprises vs. Union of India & Anr. – Legal Case Shots | LegalAware