Delhi High Court - Orders
M S Atlantic International Trading Pvt ... vs Union Of India & Ors on 13 August, 2025
Author: Prathiba M. Singh
Bench: Prathiba M. Singh
$~1 (SDB)
* IN THEHIGH COURTOF DELHI AT NEW DELHI
+ W.P.(C) 6062/2025
M S ATLANTIC INTERNATIONAL TRADING PVT LTD & ORS.
.....Petitioners
Through: Ms. Anjali Jha Manish, Ms. Madhuri
M. & Ms. Priyadarshi Manish, Advs.
versus
UNION OF INDIA & ORS. .....Respondents
Through: Mr. Ruchesh Sinha, Sr. Standing
Counsel, Ms Monalisa Maity and Ms.
Upasna Vashistha, Advs.
CORAM:
JUSTICE PRATHIBA M. SINGH
JUSTICE RAJNEESH KUMAR GUPTA
ORDER
% 13.08.2025
1. This hearing has been done through hybrid mode.
2. This matter has been listed before this Court for directions. The submissions in this matter were heard on 9th July, 2025 and the order was reserved. The issue raised in this petition is in respect of the interpretation and applicability of Section 122 (1A) and whether penalties under the said provision could have been imposed upon the Petitioner or not.
3. A batch of matters were listed before this Court immediately thereafter, wherein several legal issues in respect of Section 122 (1A) of the Central Goods and Service Tax Act, 2017 (hereinafter, 'the CGST Act'), have been raised.
4. The present petition was filed by the Petitioners under Article 226 of the Constitution of India, challenging the validity of Section 155 & Section 122(1A) of the CGST Act and the prayer therein is for reading down the said provision.
W.P.(C) 6062/2025 Page 1 of 5This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 19/08/2025 at 21:46:41
5. In addition, challenge has been raised to the Order-in-Original dated 3rd February, 2025 passed by the Additional Commissioner, CGST, Delhi South Commissionerate (hereinafter, the impugned order).
6. The brief background of this case is that the Petitioners are stated to be a 100 percent export house which has been involved in the export of the various ready garments and footwears since 2013-14.
7. The case of the Petitioners with respect to the transactions that have been alleged in the impugned order is that they have made the export after payment of IGST and have claimed refund of IGST under Section 54(3) of the CGST Act read with Rule 96 of the CGST Rules.
8. The goods, according to the Petitioners, had been delivered at the concerned ICD TKD ports and export proceeds were thereafter received.
9. Sometime in July-August 2022, the Department received intelligence that two persons namely Mr. Avijeet Saluja & Mrs. Lupita Saluja had opened several firms and had purchased fake invoices worth crores of rupees for export purposes. It is alleged that no goods were supplied in respect of the said invoices and cheap quality goods were purchased for the purpose of fraudulently availing Input Tax Credit (hereinafter, ITC).
10. Some of the sub-standard goods were thereafter claimed to be exported to various countries and refund of ITC against these exports was claimed. The firms which were involved were M/s Sunflame Trading Pvt. Ltd., Blue Star International Pvt. Ltd. and M/s. Atlantic International Trading Pvt. Ltd..
11. Various raids were conducted by the Department at the premises of these firms and the promoters of the same. According to the Department, the firms had obtained IGST refund to the tune of Rs. 45.75 crores which was erroneously given by utilizing ineligible ITC on the basis of goods-less W.P.(C) 6062/2025 Page 2 of 5 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 19/08/2025 at 21:46:41 invoices.
12. The various firms which were also involved in enabling the fake ITC refunds were located at the same addresses which are set out in the Show Cause Notice dated 26th August, 2022 (hereinafter, the SCN). Due to impending arrest, the promoters of the Petitioner firm had, in fact, prayed for anticipatory bail and were granted the same.
13. After the investigation was concluded at various premises, suppliers' verification was also undertaken of various firms including M/s H.K. International, M/s Universal Enterprises, M/s Navdisha International Marketing Pvt. Ltd., M/s Ultra Enterprises, M/s Evergreen Enterprises & M/s Srishti Exports. These searches, according to the Department, had revealed that the alleged suppliers of M/s. Atlantic International Trading Pvt. Ltd. were non-existent and their addresses could not be found as no such firms existed at the given address.
14. The total amount of ITC which was alleged to have been fraudulently availed is as under:
"
"
15. It was realised that the e-way bills which were given, had the names of transporters. The said transporters were also verified and after scrutiny of the said e-way bills and the statements of the transporters which were recorded, W.P.(C) 6062/2025 Page 3 of 5 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 19/08/2025 at 21:46:41 the Department came to the conclusion that none of these transporters existed and they did not supply any goods to M/s. Atlantic International Trading Pvt. Ltd. Even the financial transactions were considered.
16. The Petitioners had also participated in the SCN proceedings and the impugned order was passed by which various penalties have been imposed upon the Petitioner.
17. Amongst the other arguments raised on behalf of the Petitioners, it was contended by the ld. Counsel for the Petitioners that Section 122(1A) of the CGST Act has been given retrospective effect in this case and thus, the impugned order is liable to be set aside on the ground of such retrospective applicability being unlawful in nature.
18. On behalf of the Respondent, ld. Counsel had relied upon the decision in W.P. (C) 5083 of 2025 titled Gurudas Mallik Thakur v. Commissioner of CGST & Anr. wherein the applicability of Section 122(1A) of the CGST Act has been discussed.
19. In addition, it is noticed that in Petition for Special Leave to Appeal (C) No. 18178/2025 titled Mukesh Kumar Garg v. Union of India & Ors., the question of applicability of Section 122 (1A) of the CGST Act in a retrospective manner is also being considered by the Supreme Court. The order dated 4th August, 2025 passed in the said case is also set out below:
"1. Two primary contentions have been raised. First, Section 122(1) of the Central Goods and Services Tax Act, 2017 (for short 'the Act') would not be applicable to the petitioner as he is a non-taxable person. Secondly, the provisions of Section 122 (1A) of the Act which came into force w.e.f. 01.01.2021 cannot be applied retrospectively for the Assessment Years 2017- 2020.W.P.(C) 6062/2025 Page 4 of 5
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 19/08/2025 at 21:46:41
2. Leave granted.
3. In the meanwhile, there shall be stay on the recovery of the amount directed to be deposited provided the appellant deposits 25% of the demand before the GST Department either through Electronic Ledger or through Cash Ledger."
20. Considering the fact that now there are a batch of matters wherein similar issues have been raised, this Court deems it appropriate to issue notice in the present petition. Mr. Sinha, ld. Counsel accepts notice on behalf of the Respondent.
21. Let a counter affidavit be filed within six weeks. Rejoinder, thereto, be filed within four weeks.
22. List along with W.P.(C) 5643/2025 and other connected matters on 10th November, 2025.
23. This matter shall not be treated as part heard. The judgment is de- reserved.
PRATHIBA M. SINGH, J RAJNEESH KUMAR GUPTA, J AUGUST 13, 2025 dj/ss W.P.(C) 6062/2025 Page 5 of 5 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 19/08/2025 at 21:46:41