Archive · 14 Nov 2025
Delhi HC imposes ₹5 lakh cost on trader for suspected GST fraud
Imagine a shop owner wanted to close their business registration.
They went to court because they said the government was taking too long to let them close it.
But when the judge asked questions, the shop owner wasn't truthful.
They claimed they still had their shop, but it turned out they put up the sign just for a video to trick the judge!
The judge realized the owner might have been trying to hide something, like taking money (called Input Tax Credit) unfairly.
Because the owner wasn't honest, the judge made them pay a big fine of 5 lakh rupees to different legal groups.
The judge also told the government to take serious action against the owner.
The Delhi High Court imposed a ₹5 lakh cost on a trader for misleading the court.
The trader petitioned for the cancellation of his GST registration, alleging delays by the department.
The GST Department reported the trader had a turnover of over ₹7 crore in 6-7 months without paying any GST in cash.
A field visit indicated the business was not operating at the registered address.
The court observed the trader installed a shop board just before the hearing, likely for a video to deceive the court about his business's existence and suspected ITC fraud.
- Who
- A trader and the Delhi High Court
- What
- The Delhi High Court imposed a ₹5 lakh cost on a trader for attempting to mislead the court and suspected Input Tax Credit (ITC) fraud.
- When
- The court made the ruling during a hearing.
- Where
- Delhi High Court
- Why
- The trader petitioned to cancel his GST registration, but the court found evidence of fraudulent ITC claims and misrepresentation of his business.
- Cost Imposed
- ₹5 lakh
- Distribution of Cost
- ₹2 lakh to Delhi High Court Bar Association, ₹2 lakh to GST Department, ₹1 lakh to Sales Tax Bar Association
- Alleged Turnover
- Over ₹7 crore in 6-7 months
- GST Paid in Cash
- None
- Reason for Petition
- Delay in GST registration cancellation