Ramesh Kumar Wadhera v. Deputy Director Int Directorate General of Gst Intelligence and Ors

Order-in-Originaldated04.02.2025.

¶13Investigations unequivocally establish that Ramesh Wadhera is the principal conspirator in the racket involving fake firms. His involvement in conceiving, managing, and executing the fraudulent activities is discussed in detail in Para 68.f of the SCN dated

02.08.2024 [page no. 925 of the Writ Petition]. His habitual offending behaviour is also established through multiple past investigations conducted by DRI in customs evasion matters. DRI and Customs authorities have also taken action against entities such as M/s Ambay Trading Co., M/s Stalk Overseas, M/s Swadeshi Enterprises, M/s Numero Enterprises, M/s Roxan Solutions Inc., and M/s Aircon Overseas, as outlined in Paras 71.a to 71.e of the said SCN [page no. 968 to 971 of the writ petition].

¶14In compliance with directions of the Hon'ble Court vide order dated 28.04.2025, further details regarding other show cause notices and proceedings initiated against the noticee firms and individuals mentioned in SCN dated 02.08.2024 and O-I-0 dated 04.02.2025 have been collated from the Enforcement Module of the GST Back-Office (GST-BO) system. A compilation of SCNs (Form GST DRC-01) and orders issued by various State GST authorities is annexed herewith as Annexure-1.

¶15As per the available records, 42 noticee firms named in the SCN have been subjected to SCNs and subsequent adjudication proceedings by different State GST authorities. Tax, interest, and penalty demands have been confirmed in most cases, except for a few where complete details are not available on the GST-BO1 portal.

¶16Additional information from DRI and other databases is being compiled and shall be submitted before this Hon'ble Court in due course. As the compilation is voluminous, it is respectfully prayed that this Hon'ble Court may graciously grant further time to file the same It is submitted accordingly."

¶11In addition, it is also pointed out to the Court that in terms of order dated 29th January, 2025 the Petitioner had filed a writ petition earlier being W.P.(C) 1115/2025 which was also rejected by a detailed order.

¶12Mr. Malhotra, ld. Counsel on the other hand submits that all the three hearing notices were not received by the Petitioner.

¶13The Court has heard the matter. The details of the chart submitted by the Petitioner, which according to it, demonstrates the timeline of hearing notices issued to it has been set out below: S. NO. Date of notice of hearing Date of notice received Date of hearing Reply to notice of hearing Confirmation of tracking report of speed post

1.

08.01.2025 By speed post -

13.01.2025 at 6 PM

13.01.2025 at 1 PM

14.01.2025 confirmed

2.

15.01.2025 By speed 17.01.2025 21.01.2025 Confirmed post –

20.01.2025 at PM

3.

18.01.2025 By speed post -

24.01.2025

22.01.2025 at PM

29.01.2025 Confirmed

¶14The above may have persuaded the Court to take a view that the Petitioner was not given a proper hearing. However, what transpires is that after receiving these notices, the Petitioner filed a writ petition being W.P.(C) 1115/2025 titled, Ramesh Wadhera v. Deputy Director (INT.) Directorate General of GST intelligence and others. The said matter was heard on 29th January, 2025 with the following directions: "4. That then takes us to the challenge which stands raised to the impugned SCN in itself with learned counsel drawing our attention to our order passed in W.P.(C) 14788/2024 to contend that the petitioner is liable to be accorded identical relief. We find ourselves unable to sustain that submission since the said writ petition itself had been instituted by an individual who was not named or had been found in the course of any investigation to be the operator of the various firms concerned. xxx

¶6Bearing in mind the aforesaid, and the seriousness of the allegations which stand levelled, we find no ground to interdict the SCN proceedings."

¶15Thus, in the said matter, the Court has clearly come to the conclusion that the Show Cause Notice does not deserve to be quashed. When the above order was passed, the Petitioner had an opportunity to seek a hearing in the Show Cause Notice from the Court itself, which the Petitioner did not do. The factum of non-service of notice in time of hearing was also not raised when the Court decided the matter on 29th January, 2025.

¶16The nature of the allegations against the Petitioner are extremely serious. There are several co-noticees who have also been involved in illegal and fraudulent transactions. Any relief being granted to the Petitioner in exercise of writ jurisdiction, would in effect, give a premium to such firms who are involved in fraudulent availment of benefits under the GST Act.

¶17The Petitioner has all along been aware of the proceedings before the Adjudicating Authority and has not made any efforts on its own to appear for the personal hearing. When it received the first notice dated 8th January, 2025, the Petitioner got in touch with the Department and it appears that the Petitioner made efforts to be present at the next date of hearing. Further, the Petitioner also had the opportunity of seeking a personal hearing, when the order was passed by the Court on 29th January, 2025, which he failed to do.

¶18In view of the recent decision of this Court in Mukesh Kumar Garg v. Union of India & Ors. (2025:DHC:3532-DB) where similar grounds have been raised for challenge of the Show Cause Notice therein, this Court held that writ jurisdiction ought not to be exercised in such cases. The Court in the said decision, inter alia, observed that petitions under Article 226 of the Constitution of India would be liable to be entertained only in case of persons who come with clean hands and not in favour of the persons who present twisted facts or misrepresent the true and correct picture on record. The relevant portion of the said decision is extracted hereunder: "It is well settled in various decisions of the Supreme Court that petitions under Article of Constitution of India would be liable to be entertained only in case of persons who come with clean hands and not in favour of the persons who present twisted facts or misrepresent the true and correct picture on record. The said decisions along with their relevant paragraphs read as under: ● K.D. Sharma v. SAIL, (2008) 12 SCC 481 "34. The jurisdiction of the Supreme Court under Article 32 and of the High Court under Article 226 of Constitution is extraordinary, equitable and discretionary. Prerogative writs mentioned therein are issued for doing substantial justice. It is, therefore, of utmost necessity that the petitioner approaching the writ court must come with clean hands, put forward all the facts before the court without concealing or suppressing anything and seek an appropriate relief. If there is no candid disclosure of relevant and material facts or the petitioner is guilty of misleading the court, his petition may be dismissed at the threshold without considering the merits of the claim. XXXX

¶38The above principles have been accepted in our legal system also. As per settled law, the party who invokes the extraordinary jurisdiction of this Court under Article 32 or of a High Court under Article 226 of the Constitution is supposed to be truthful, frank and open. He must disclose all material facts without any reservation even if they are against him. He cannot be allowed to play "hide and seek" or to "pick and choose" the facts he likes to disclose and to suppress (keep back) or not to disclose (conceal) other facts. The very basis of the writ jurisdiction rests in disclosure of true and complete (correct) facts. If material facts are suppressed or distorted, the very functioning of writ courts and exercise would become impossible. The petitioner must disclose all the facts having a bearing on the relief sought without any qualification. This is because "the court knows law but not facts"." ● Ramjas Foundation v. Union of India, (2010) 14 SCC 38 "21. The principle that a person who does not come to the court with clean hands is not entitled to be heard on the merits of his grievance and, in any case, such person is not entitled to any relief is applicable not only to the petitions filed under Articles 32, 226 and 136 of the Constitution but also to the cases instituted in others courts and judicial forums. The object underlying the principle is that every court is not only entitled but is duty bound to protect itself from unscrupulous litigants who do not have any respect for truth and who try to pollute the stream of justice by resorting to falsehood or by making misstatement or by suppressing facts which have a bearing on adjudication of the issue(s) arising in the case." ● Prestige Lights Ltd. v. SBI, (2007) 8 SCC 449 "33. It is thus clear that though the appellant Company had approached the High Court under Article 226 of the Constitution, it had not candidly stated all the facts to Court. The High Court is exercising discretionary and extraordinary jurisdiction under Article 226 of the Constitution. Over and above, a court of law is also a court of equity. It is, therefore, of utmost necessity that when a party approaches a High Court, he must place all the facts before the Court without any reservation. If there is suppression of material facts on the part of the applicant or twisted facts have been placed before the Court, the writ court may refuse to entertain the petition and dismiss it without entering into merits of the matter."

¶19Under these circumstances, the Petitioner is relegated to the remedy of filing an appeal under Section 107 of the CGST Act along with the requisite pre-deposit.

¶20In view of the fact that the Order-in-Original is dated 4th February, 2025, the Petitioner is granted time till 10th July, 2025 to file the appeal along with the pre deposit, if any. If the appeal is filed, within the timeline granted, the same shall not be dismissed on limitation but shall be considered and adjudicated on merits. PRATHIBA M. SINGH JUDGE RAJNEESH KUMAR GUPTA JUDGE MAY 21, 2025/da/rks

* IN THE HIGH COURT OF DELHI AT NEW DELHI Date of Decision: 21st May, 2025 + W.P.(C) 5465/2025 & CM APPL. 24919/2025 RAMESH KUMAR WADHERA .....Petitioner Through: Mr. Naveen Malhotra and Mr. Ritvik Malhotra, Advocates. versus DEPUTY DIRECTOR INT DIRECTORATE GENERAL OF GST INTELLIGENCE AND ORS .....Respondents Through: Mr. Pranay Mohan Govil, Sr. Standing Counsel. Mr. Aditya, SSC for CBIC with Ms. Arya Suresh, Advocate. CORAM: JUSTICE PRATHIBA M. SINGH JUSTICE RAJNEESH KUMAR GUPTA Prathiba M. Singh, J. (Oral) 1. This hearing has been done through hybrid mode. 2. The present petition has been filed under Articles 226 and 227 of the Constitution of India read with Section 151 CPC, inter alia, challenging the impugned Order-in-Original dated 4th February, 2025 (hereinafter, the 'impugned Order-in-Original') passed by the Office of the Commissioner, Central Tax (Delhi West), which was passed pursuant to the Show Cause Notice dated 2nd August, 2024 (hereinafter, the 'SCN') issued by the Directorate General of GST Intelligence. 3. The ground on which the challenge has been raised in the present petition, is that the notices of hearing were not served upon the Petitioner and the impugned Order-in-Original has been passed without hearing the Petitioner. 4. On the last date of hearing, i.e., 28th April, 2025 the Court considered the allegations made in the SCN as also the demands raised therein. Subsequently, the Court, with some consternation, observed that the parties involved in this particular SCN and the impugned Order-in-Original, along with the firms concerned, are also involved in certain other Show Cause Notices and other proceedings initiated in respect of wrongful availment of Input Tax Credit ('ITC') under the Goods and Services Tax regime. 5. The Court further on the said date, observed that there are various allegations against lawyers which have been raised in the SCN and the impugned Order-in-Original. The said allegations were made in respect of how the said lawyers played a role in incorporating all the alleged firms in order to enable wrongful availment of ITC. 6. It was also observed on 28th April, 2025 that this matter has some commonality with W.P.(C)14788/2024 titled Akhil Krishan Maggu & Ors. Vs. Deputy Director (Int.) Director General Of Gst Intelligence And Ors. 7. In view thereof, on 28th April, 2025 the following directions were passed: "8. In view of the above, let the Respondent No. 1 - Directorate General of GST Intelligence (hereinafter "DGGI") place on record a status report giving the details of all Show Cause Notices and other investigations/proceedings initiated against all the firms and the individuals who are allegedly involved in the present SCN and impugned Order-in-Original dated 4th February, 2025. 9. Let the said status report be filed by the next date of hearing. 10. Mr. Ritwik Saha, ld. Counsel for the Respondent No. 1 - DGGI shall communicate the present order to concerned officer, DGGI, for necessary information and compliance." 8. The matter is again taken up for hearing today. On the last date of hearing, i.e., 28th April, 2025, the Directorate General of GST Intelligence ('DGGI') was directed to place on record a status report giving details of all the Show Cause Notices and other investigations which may have been initiated against the various firms and individuals involved in the present SCN and the impugned order in original dated 4th February, 2025. 9. Accordingly, a status report has been filed on behalf of the DGGI. The same has been taken on record. 10. On a perusal of the said status report, it is observed that a list of 73 cases has been attached which contains the details of other Show Cause Notices and orders issued by the State GST Authorities against the noticees of the SCN. Further, the status report reveals that the entire investigation pertaining to this matter started when high value transactions were noticed in respect of four firms. The said status report is relevant a