Ambika Traders Vs Additional Commissioner

The Supreme Court of India dismissed a Special Leave Petition filed by Ambika Traders, thereby upholding the Delhi High Court's decision on two key issues related to a GST fraud case. The petitioner was accused of availing fraudulent Input Tax Credit (ITC) over multiple years (FY 2017–18 to 2021–22). The GST department issued a single, consolidated Show Cause Notice (SCN) for this entire period. The petitioner filed a writ petition challenging the consolidated SCN and arguing that the denial of cross-examination of witnesses violated the principles of natural justice.

The Delhi High Court had previously dismissed the writ petition. It held that under Sections 74(3) and 74(4) of the CGST Act, notices can be issued "for any period" or "such periods," which is distinct from the term "financial year" used in Section 74(10). The court reasoned that multi-year SCNs are a lawful and practical tool for dealing with fraudulent patterns that span multiple tax periods. On the issue of cross-examination, the court noted that a writ petition is not the appropriate remedy for challenging factual findings or the denial of cross-examination when the petitioner has not yet availed the statutory remedy of appeal.

The Supreme Court dismissed the SLP, effectively affirming these findings.

The Supreme Court dismissed the Special Leave Petition, thereby upholding the Delhi High Court's ruling. This decision establishes two key legal principles:

1. Multi-Year SCNs: A consolidated SCN covering multiple financial years is permissible under Section 74 of the CGST Act, particularly in cases of fraudulent ITC claims, as the law uses the term "for any period" and not "financial year."

2. Jurisdiction of Writ Petition: A writ petition is not the appropriate legal forum for challenging factual issues like the denial of cross-examination, especially when an alternative and equally efficacious remedy of statutory appeal is available.