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Sanskriti Exim Private Limited vs. Directorate General of GST Intelligence, DZU & Ors.

Writ Petition (Civil) · 2026:DHC:7978-DBDecided 18 Sept 2026New Delhi Bench
W.P.(C) 929/2025CNR: DLHC010025762025
Justice Anil Kshetarpal · Justice Shail Jain

Background

Sanskriti Exim, a garment exporter, was investigated by central GST authorities (DGGI) for allegedly claiming input tax credit based on invoices from non-existent suppliers and using that credit to claim export tax refunds. Separately, Delhi's own State GST department had already issued its own notices and confirmed demands against the company for wrongly claiming input tax credit for some of the same years. The company challenged the central authorities' show cause notice (and the tax demand order that followed it) in the High Court, arguing the central proceedings were illegal because state authorities had already acted on the same subject matter, and that combining multiple years into one notice was improper.

Decision Breakdown

The Court dismissed the writ petition, primarily because the company already had an adequate alternative remedy in an appeal to the GST appellate authority, since the demand order had by then already been passed, and courts normally decline to intervene by writ once that door is open. On the merits, applying a recent Supreme Court test (from Armour Security), the Court held the state and central proceedings were not about the "same subject matter": the state case concerned specific ineligible credit claims from cancelled dealers, while the central case concerned a distinct, larger fraud investigation into fictitious suppliers, so there was no legal bar to both proceeding. The Court also rejected the argument that one notice could not validly cover multiple financial years.

Lesson Learnt

Businesses facing both state and central GST notices covering overlapping periods cannot assume the second notice is automatically barred merely because both relate to input tax credit. The law asks whether the two proceedings target the very same alleged wrongdoing, not just the same general topic or years; and once a formal tax demand order exists, the proper route is the statutory appeal, not a writ petition to the High Court.

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