Manoj Kumar Prop M K Steel Traders vs Additional Commissioner, Central Goods And Services Tax & Anr.

$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on: 15.10.2026
Judgment pronounced on: 28.10.2026
Judgment uploaded on: 28.10.2026
# CNR No. DLHC011076182025
+ W.P.(C) 50/2026, CM APPL. 128/2026 & CM APPL. 129/2026

MANOJ KUMAR PROP M K STEEL TRADERS .....Petitioner
Through: Mr. A.K. Babbar, Mr. B.K.
Tripathi and Mr. Ankur Sethi,
Advs.

versus
ADDITIONAL COMMISSIONER, CENTRAL GOODS AND
SERVICES TAX & ANR. .....Respondents
Through: Mr. Akash Verma, SSC.

# CNR No. DLHC011099162025
+ W.P.(C) 2528/2026, CM APPL. 12259/2026 & CM APPL.
12260/2026

MANOJ KUMAR PROP M K STEEL TRADERS .....Petitioner
Through: Mr. A.K. Babbar, Mr. B.K.
Tripathi and Mr. Ankur Sethi,
Advs.

versus
ADDITIONAL COMMISSIONER, CENTRAL GOODS AND
SERVICES TAX & ANR. .....Respondents
Through: Mr. Akash Verma, SSC.
CORAM:
HON'BLE MR. JUSTICE ANIL KSHETARPAL
HON'BLE MR. JUSTICE BHARAT PARASHAR
J U D G M E N T
ANIL KSHETARPAL, J.:
1. With the consent of learned counsel representing the parties, the
connected Writ Petitions, being W.P.(C) 50/2026 and W.P.(C)
Signature Not Verified
Signed By:SAVITA
PASRICHA
Signing Date:28.10.2026
14:03:56
W.P.(C) 50/2026 and connected matter Page 1 of 12

2528/2026, are taken up together for consideration and disposal by
way of this common judgment, as both arise out of proceedings
initiated by the Goods and Services Tax authorities in relation to
allegations concerning the availment and passing on of ineligible
Input Tax Credit (hereinafter referred to as ‘ITC’) through invoices
allegedly not supported by genuine supplies of goods.
2. Both Writ Petitions assail separate orders-in-original dated
04.02.2025 passed by the Additional Commissioner, Central Goods
and Services Tax, despite the availability of a statutory remedy of
appeal under the Central Goods and Services Tax Act, 2017
(hereinafter referred to as the ‘CGST Act’). While the two
proceedings arise from the same investigation, the demands raised
against the Petitioner and the objections urged in the respective Writ
Petitions are distinct and are, therefore, considered separately to the
extent necessary.
FACTUAL MATRIX
3. The proceedings against the Petitioner form part of an
investigation into the activities of various firms allegedly involved in
the availment and passing on of ineligible ITC by using invoices
which did not correspond to genuine receipt and supply of goods. The
show-cause notices bearing No. 107/2024-25 dated 01.08.2024,
forming the basis of the respective proceedings, refer to a search
conducted under Section 67(2) of the CGST Act at the premises of
Shri Mohit Jain. During the search, stamps, letterheads and invoices
pertaining to multiple firms were allegedly seized. The documents and
material gathered during the investigation were relied upon by the
Signature Not Verified
Signed By:SAVITA
PASRICHA
Signing Date:28.10.2026
14:03:56
W.P.(C) 50/2026 and connected matter Page 2 of 12

Department to allege that multiple firms had been registered and
operated for the purpose of availing and passing on ineligible ITC
through invoices unsupported by genuine supplies of goods.
4. The investigation further proceeded on the allegation that Shri
Mohit Jain had registered multiple firms and that a network of firms
had been created to facilitate the availment and passing on of
ineligible ITC. According to the Department, the transactions reflected
in the invoices did not correspond to genuine receipt or supply of
goods and were part of an arrangement intended to defraud the
revenue.
5. During the pendency of the investigation, the statement of the
Petitioner, Shri Manoj Kumar, was recorded on 19.05.2023. As
recorded in the proceedings, the Petitioner stated that he used to assist
in the distribution of invoices which were not backed by actual
supplies of goods and were made available through brokers, against
commission.
6. The investigation also disclosed, according to the Department, a
chain of transactions involving several firms. In particular, it was
alleged that M/s Metal Tech had availed ITC amounting to
Rs.2,94,04,610/- on the strength of invoices received from M/s Shree
Shyam Enterprises, which, in turn, had received inward supplies from
various other firms. The Department's case was that the
interconnected transactions involving these firms formed part of a web
created to facilitate the availment and passing on of ineligible ITC,
thereby defrauding the revenue.
Signature Not Verified
Signed By:SAVITA
PASRICHA
Signing Date:28.10.2026
14:03:56
W.P.(C) 50/2026 and connected matter Page 3 of 12

7. The record placed before this Court reflects that DRC-01 dated
02.08.2024 was issued in respect of each of the financial years
forming the subject matter of the two Writ Petitions, along with the
respective show-cause notice bearing No. 107/2024-25 dated
01.08.2024. The proceedings culminated in separate orders-in-original
dated 04.02.2025, after the replies submitted by the noticees had been
examined by the Adjudicating Authority.
8. By the order impugned in W.P.(C) 50/2026, the Petitioner has
been called upon to pay an amount of Rs.6,14,568/-. By the order
impugned in W.P.(C) 2528/2026, a demand of Rs.2,93,53,860/- has
been raised against the Petitioner. Against various other notices than
the Petitioner, the amounts demanded are separate. Aggrieved by the
respective orders, the Petitioner has approached this Court by way of
the present Writ Petitions.
CONTENTIONS OF THE PETITIONER
9. Learned counsel appearing for the Petitioner contends that,
notwithstanding the availability of a statutory appeal under the CGST
Act, the present Writ Petitions warrant consideration because the
objections raised concern the validity of the show-cause notices and
the legality of the consequential orders.
10. In W.P.(C) 50/2026, the principal contention is that the show-
cause notice issued under Section 74 of the CGST Act is non-speaking
and omits vital particulars necessary to justify the invocation of the
said provision against the Petitioner. It is submitted that the notice
does not adequately disclose the factual basis on which the requisite
statutory ingredients are alleged to be attracted in the Petitioner's case
Signature Not Verified
Signed By:SAVITA
PASRICHA
Signing Date:28.10.2026
14:03:56
W.P.(C) 50/2026 and connected matter Page 4 of 12

and that the proceedings founded upon such a notice cannot be
sustained.
11. In W.P.(C) 2528/2026, learned counsel raises a distinct
objection concerning the imposition of penalty. It is contended that the
show-cause notice dated 01.08.2024, accompanied by DRC-01 dated
02.08.2024, did not propose recovery of penalty from the Petitioner.
Nevertheless, the order-in-original dated 04.02.2025 directs the
Petitioner to pay penalty. According to learned counsel, such a penalty
could not have been imposed in the absence of a proposal to that
effect in the show-cause notice.
12. Learned counsel has also placed reliance upon the judgment of
the Supreme Court in M/s G.R. Infra Projects Limited, Ratlam v. The
State of Madhya Pradesh & Ors. , Civil Appeal No. 11277/2026. It is
submitted that the invocation of Section 74 of the CGST Act cannot
be sustained by the mere use of expressions such as ‘fraud’, ‘wilful
misstatement’ or ‘suppression of facts’, without disclosing the factual
particulars which led the proper officer to arrive at such a conclusion.
On this basis, learned counsel seeks interference with the impugned
orders in the exercise of jurisdiction under Article 226 of the
Constitution of India.
ANALYSIS & FINDINGS
13. This Court has considered the submissions advanced by learned
counsel for the parties and examined the nature of the objections
raised in the two Writ Petitions.
Signature Not Verified
Signed By:SAVITA
PASRICHA
Signing Date:28.10.2026
14:03:56
W.P.(C) 50/2026 and connected matter Page 5 of 12

14. At the outset, the availability of an efficacious statutory remedy
of appeal against the orders dated 04.02.2025 is not disputed. The
issue, therefore, is whether the objections urged by the Petitioner
furnish sufficient ground for this Court to exercise its writ jurisdiction
notwithstanding the alternative remedy provided under the CGST Act.
15. The jurisdiction of this Court under Article 226 of the
Constitution of India is wide. The existence of an alternative statutory
remedy does not, by itself, bar the exercise of such jurisdiction.
However, where the statute provides a mechanism for challenging
orders passed by the adjudicating authority, the writ court ordinarily
exercises restraint in entertaining a petition which can appropriately
be examined by the statutory appellate forum. The existence of an
alternative remedy is, therefore, a material consideration in deciding
whether interference is warranted at this stage.
W.P.(C) 50/2026
16. The show-cause notice forming the subject matter of W.P.(C)
50/2026 is a common notice issued to various noticees in connection
with the investigation into the alleged availment and passing on of
ineligible ITC through invoices unsupported by genuine supplies of
goods. The notice, as placed before this Court, runs into nearly 80
pages of the paper book and sets out the Department's case concerning
the alleged manner in which the network of firms was utilised for the
generation and passing on of ineligible ITC.
17. The Petitioner contends that vital particulars necessary to
sustain proceedings under Section 74 of the CGST Act are missing
from the notice. However, upon perusal of the notice, this Court finds
Signature Not Verified
Signed By:SAVITA
PASRICHA
Signing Date:28.10.2026
14:03:56
W.P.(C) 50/2026 and connected matter Page 6 of 12

that it contains a detailed account of the alleged transactions and the
manner in which invoices unsupported by genuine supplies of goods
were allegedly used to avail and pass on ineligible ITC. The alleged
modus operandi, involving multiple firms and interconnected
transactions, has been set out in the notice.
18. In these circumstances, the contention that the notice omits vital
details cannot be accepted as a sufficient ground, in itself, for this
Court to interfere with the impugned order in the exercise of writ
jurisdiction. The fact that the notice is common to several noticees
does not, by itself, render it deficient. What is material for the present
purpose is that the notice sets out the Department's allegations
concerning the alleged arrangement and the manner in which
ineligible ITC was purportedly availed and passed on.
19. It is also relevant that the Adjudicating Authority passed the
order dated 04.02.2025 after considering the reply submitted by the
Petitioner. The Petitioner remains at liberty to challenge the findings
recorded in the impugned order and to urge before the statutory
appellate authority that the notice, the material relied upon by the
Department or the conclusions drawn by the Adjudicating Authority
do not satisfy the requirements of Section 74 of the CGST Act.
20. Having regard to the detailed nature of the notice and the
availability of the statutory appellate remedy, this Court does not
consider it appropriate to exercise writ jurisdiction to interfere with
the order impugned in W.P.(C) 50/2026. The question whether the
allegations and material set out in the notice ultimately establish the
Signature Not Verified
Signed By:SAVITA
PASRICHA
Signing Date:28.10.2026
14:03:56
W.P.(C) 50/2026 and connected matter Page 7 of 12

Petitioner's liability is left open for consideration by the competent
appellate authority in accordance with law.
W.P.(C) 2528/2026
21. In W.P.(C) 2528/2026, the Petitioner has placed on record the
show-cause notice forming the basis of the impugned order. The
notice identifies the roles attributed to the various noticees, including
the Petitioner, in the transactions under investigation. The proceedings
also refer to the statement of the Petitioner recorded on 19.05.2023, as
well as the reply submitted by him during the adjudication
proceedings.
22. Learned counsel for the Petitioner has specifically contended
that the show-cause notice did not propose the imposition of penalty
upon the Petitioner, whereas the order-in-original dated 04.02.2025
directs payment of penalty. The objection raises a question concerning
the scope of the notice and the legality of the consequential penalty. In
particular, it requires examination of whether the notice, read as a
whole and in the context of the applicable statutory provisions,
contained a proposal which could lawfully sustain the penalty
imposed by the Adjudicating Authority.
23. The aforesaid question can be examined by the statutory
appellate authority in an appeal against the impugned order. The
appellate authority would be competent to consider the terms of the
show-cause notice, the reply submitted by the Petitioner, the statement
recorded during the investigation, the findings in the order-in-original
and the relevant provisions of the CGST Act, and to determine
whether the imposition of penalty is legally sustainable.
Signature Not Verified
Signed By:SAVITA
PASRICHA
Signing Date:28.10.2026
14:03:56
W.P.(C) 50/2026 and connected matter Page 8 of 12

24. Accordingly, this Court does not consider it appropriate to
determine the issue concerning the penalty in the present writ
proceedings, particularly when the statutory remedy of appeal is
available to the Petitioner. The Petitioner may specifically raise this
objection before the appellate authority, which shall examine the same
in accordance with law and on its own merits.
25. It is clarified that the decision to relegate the Petitioner to the
statutory appellate remedy does not amount to an acceptance of the
Department's position on the imposition of penalty. No final opinion is
expressed on whether the show-cause notice contained an adequate
proposal for imposition of penalty or whether the penalty imposed by
the impugned order is sustainable in law.
RELIANCE ON M/s G.R. Infra Projects Limited (supra)
26. Learned counsel for the Petitioner has relied upon the judgment
of the Supreme Court in M/s G.R. Infra Projects Limited (supra).
This Court has carefully considered the said judgment and the
principle enunciated therein concerning the invocation of Section 74
of the CGST Act.
27. The Supreme Court held that the mechanical use of expressions
such as ‘fraud’, ‘wilful misstatement’ or ‘suppression of facts’,
without setting out the particulars which persuaded the assessing
officer to conclude that the assessee had employed any such
surreptitious device, are insufficient to sustain proceedings under
Section 74 of the CGST Act. The factual basis for invoking the
provision must be discernible from the show-cause notice itself.
Signature Not Verified
Signed By:SAVITA
PASRICHA
Signing Date:28.10.2026
14:03:56
W.P.(C) 50/2026 and connected matter Page 9 of 12

28. The principle laid down by the Supreme Court underscores that
the mere use of statutory expressions cannot substitute for the
disclosure of the material facts forming the basis for invoking Section
74. The application of that principle to a particular case, however,
requires consideration of the contents of the notice under challenge
and the nature of the allegations set out therein.
29. In the present case, the notices arise out of an investigation into
an alleged network of firms and set out the Department's case
concerning the manner in which ineligible ITC was allegedly availed
and passed on through invoices unsupported by genuine supplies of
goods. As noticed above, the notice forming the subject matter of
W.P.(C) 50/2026 runs into nearly 80 pages and contains details of the
alleged transactions and modus operandi. The notice forming the
subject matter of W.P.(C) 2528/2026 identifies the roles attributed to
the various noticees, including the Petitioner.
30. It is further noted that the proceedings concern allegations
against a large number of noticees, stated to be as many as 158,
including Shri Mohit Jain, who is alleged to have masterminded the
creation of the network of multiple firms. The number of noticees
involved, by itself, does not establish the liability of any individual
noticee.
31. Having regard to the contents of the notices and the nature of
the objections raised, this Court is not persuaded that the judgment in
M/s G.R. Infra Projects Limited (supra) furnishes sufficient ground to
interfere with the impugned orders in the exercise of writ jurisdiction.
The Petitioner would be entitled to urge before the statutory appellate
Signature Not Verified
Signed By:SAVITA
PASRICHA
Signing Date:28.10.2026
14:03:56
W.P.(C) 50/2026 and connected matter Page 10 of 12

authority that the allegations and material set out in the respective
notices do not satisfy the requirements of Section 74 or otherwise fail
to sustain the demands raised against him.
32. The above conclusion does not dilute the principle laid down by
the Supreme Court or amount to a final finding that the requirements
of Section 74 stand satisfied in either case. It is confined to the
question whether the objections urged in the present Writ Petitions
warrant bypassing the statutory appellate remedy. For the reasons set
out above, this Court finds no sufficient ground to do so.
CONCLUSION
33. In view of the foregoing discussion, this Court is not inclined to
interfere with the orders-in-original dated 04.02.2025 in the exercise
of writ jurisdiction. The Petitioner is, accordingly, relegated to the
statutory remedy of appeal available under the CGST Act in respect of
each of the Impugned Orders.
34. It is clarified that this Court has not expressed any final opinion
on the merits of the demands raised against the Petitioner, the
applicability of Section 74 of the CGST Act, the sufficiency of the
material relied upon by the Department, or the legality of the penalty
imposed in W.P.(C) 2528/2026. The Petitioner shall be at liberty to
urge the grounds available to him in law before the competent
appellate authority, which shall consider the same independently and
in accordance with law.
35. In the event the Petitioner files an application under Section 14
of the Limitation Act, 1963, seeking exclusion of the period during
Signature Not Verified
Signed By:SAVITA
PASRICHA
Signing Date:28.10.2026
14:03:56
W.P.(C) 50/2026 and connected matter Page 11 of 12

which the present Writ Petitions remained pending, the same shall be
considered by the competent appellate authority in accordance with
law.
36. With the aforesaid observations, W.P.(C) 50/2026 and W.P.(C)
2528/2026 are disposed of. All pending applications also stand
disposed of.

ANIL KSHETARPAL, J.

BHARAT PARASHAR, J.
OCTOBER, 28 2026
sp/pal
Signature Not Verified
Signed By:SAVITA
PASRICHA
Signing Date:28.10.2026
14:03:56
W.P.(C) 50/2026 and connected matter Page 12 of 12