The Delhi High Court has set aside an Order-in-Original confirming a demand of Rs. 3,34,21,261 towards ITC along with equivalent penalty under Section 74 of the CGST Act, holding that the order did not disclose the names of the suppliers, their GSTINs, the dates of the relevant invoices, the dates from which registrations were cancelled, the quantum of ITC attributable to each supplier, or the material on which the cancellation dates were ascertained — and that these omissions go to the root of the adjudication and are not a mere technical defect. The ruling by Justice Anil Kshetarpal and Justice Bharat Parashar in WP(C) 583/2026 (Treco Wire India Pvt. Ltd., decided 29.09.2026) also rejected the petitioner’s constitutional challenge to Section 16(2)(c) following the Supreme Court’s speaking order in Bhandari Scrap Traders v. Union of India (SLP(C) 23931/2026, decided 24.07.2026) affirming the Gujarat HC’s Maruti Enterprises.
The court held that where the entire demand rests on the allegation that suppliers’ registrations stood cancelled from dates preceding the issuance of invoices, the finding remains at the level of a general assertion without the factual foundation needed to quantify the demand. The distinction between Section 16(2)(c) eligibility conditions and Section 74 invocation requirements is material: the constitutional validity of Section 16(2)(c) does not dispense with the requirement that the adjudicating authority satisfy itself that fraud, wilful misstatement or suppression with intent to evade is established. The petitioner’s participation in audit and contention that suppliers were registered at the relevant time was not dealt with. The matter was remanded with specific directions to identify suppliers and relevant transactions and to independently examine whether Section 74 ingredients are satisfied.
- 2026-juristway.com-2772-HC(Delhi)-GST | High Court of Delhi | W.P.(C) 583/2026 | 29.09.2026
