GST Dept Can't Probe Misuse Of GSTIN By Third Party, Power Lies With Economic Offences Wing: Delhi High Court
The Delhi High Court has made it clear that allegations of misuse of a trader's GST identification number by a third party cannot be probed by the GST Department.A division bench of Justices Prathiba M. Singh and Shail Jain observed,“Section 132 of the CGST Act, 2017 provides for certain offences which the GST Department can take cognizance of. However, the allegation here is that the...
The Delhi High Court has made it clear that allegations of misuse of a trader's GST identification number by a third party cannot be probed by the GST Department.
A division bench of Justices Prathiba M. Singh and Shail Jain observed,
“Section 132 of the CGST Act, 2017 provides for certain offences which the GST Department can take cognizance of. However, the allegation here is that the GST number of the Petitioner has been misused by a third party, who is unknown. In the opinion of this Court, under such circumstances where the allegation of the Petitioner is that there is an impersonation of the Petitioner's credentials, the matter ought to be investigated by the Economic Offences Wing.”
Petitioner was registered under the Value Added Tax ('VAT') regime under the trading style, 'M/s Samyak International'.
However, upon introduction of the GST regime, a provisional registration was allotted to 'M/s Samyak International', which according to the Petitioner, was not sought by him.
It is the Petitioner's case that he had closed his business operations from 28th July, 2017 and had sought a new registration number under the name of 'M/s Samyak Fashion (India)'. However, he received intimation from the GST department, some time in 2018-19, that there was a misuse of his provisional GST Number.
A substantial amount of ITC is stated to not only have been passed on under the name 'M/s Samyak International' but to also have been availed.
Accordingly, a demand was raised on the Petitioner for a sum of over Rs. 48 crores. However, Petitioner sought to disown him from the transactions on the ground that his provisional GST number has been misused.
The Economic Offences Wing of the Delhi Police forwarded Petitioner's complaint to the GST Department, stating that the latter has jurisdiction.
The High Court observed that there appears to be some misunderstanding with respect to the powers of the GST Department to investigate such matters. It said
“In the present case, the complaint and allegation made by the Petitioner is that the Petitioner's GST number was misused by some unknown person and none of the transactions for which the impugned demand has been raised, were conducted by the Petitioner…Accordingly, the Delhi Police (Economic Offences Wing) shall look into the complaint of the Petitioner and take action in accordance with law.”
Appearance: Mr. Pulkit Verma, Mr. Peyush Pruthi & Mr. Himanshu Yadav, Advs. for Petitioner; Mr. Atul Tripathi, SSC, CBIC with Mr. Gaurav Mani Tripathi & Mr. Shubham Mishra, Advs for R-1 & 2. Mr. Rakesh Kumar, CGSC with Mr. Sunil, Adv for R-4/Delhi Police. Mr. Samyar Jain, Adv. with Insp Awadesh Kumar & Insp. S.S. Gill, EOW. Ms. Urvi Mohan, Adv. for GNCTD. Inspector S.S. Gill, EOW, Delhi Police.
Case title: Samyak Jain v. Superintendent (Adjudication), Central Gst Delhi & Ors.
Citation: 2025 LiveLaw (Del) 1030
Case no.: W.P.(C) 9139/2025