Quick Summary: On December 23, 2025, the Delhi High Court dismissed a request by VDR Colors and Chemicals Pvt. Ltd. The company challenged an order that accused them of fraudulently using Input Tax Credit (ITC). The court decided the company should try an appeal instead.
The trouble started with a Notice to Explain issued on May 21, 2024. This notice was based on a report about M/s Paramount Enterprises, revealing suspicious deals with fake companies. VDR Colors and Chemicals Pvt. Ltd., among others, was accused of benefiting from these fake dealings.
"The total amount of fake Input Tax Credit (ITC) claimed by all three companies of Mr. Surender Kumar Jain amounts to about Rs. 6.74 Crore."
The investigation pointed at several companies, including VDR Colors and Chemicals Pvt. Ltd., for illegally claiming ITC worth Rs. 18.24 Crore. The court noted that these companies were controlled by Mr. Surender Kumar Jain.
VDR Colors and Chemicals Pvt. Ltd. argued that they weren’t given a fair chance to present their side. They claimed that no personal hearing was granted before the order was passed. However, the court found that notices for hearings were indeed sent, but the company failed to respond.
"Neither the companies nor their authorized representatives showed up for the personal hearing on any of the scheduled dates."
Justice Prathiba M. Singh and Justice Shail Jain decided not to change the original order. They emphasized that the case involved complex transactions, better suited for an appeal rather than a direct request to the court. The court suggested that VDR Colors and Chemicals Pvt. Ltd. should have followed the usual appeal process.
VDR Colors and Chemicals Pvt. Ltd. was advised to file an appeal by January 31, 2026, with the necessary initial deposit. The court assured that the appeal would be considered on its merits and not dismissed due to timing.
"The Petitioners are allowed to use the appeal option under Section 107 of the CGST Act."
The court dismissed the petition by VDR Colors and Chemicals Pvt. Ltd., emphasizing the need for the company to follow the appeal process. The company now has a chance to appeal, but they must act quickly and meet the requirements.
