Delhi High Court Sets Aside Reassessment Order Against Vedanta; Orders Fresh Consideration After GST Case Over Alleged ₹424-Crore ITC Fraud Closed

In granting relief to Vedanta Limited, the Delhi High Court has set aside an order of the the Income Tax Department for initiation of reassessment action against the Copper manufacturer, over alleged fraudulent availment of Input tax credit worth over ₹424 Crore.

A division bench of Justices Prathiba M. Singh and Shail Jain observed that the GST Department had already closed the case.

“Closing of the proceedings by the GST Department would have an impact and bearing on the Section 148A proceedings and, therefore, this Court is of the opinion that the impugned order deserves to be set aside, and the matter deserves to be remanded for reconsideration, in view of the GST order dated 11th July, 2025,” the judges said.

The plea was filed by Vedanta challenging an order passed by the Assistant Commissioner of Income Tax under Section 148A(3) for the Assessment Year 2019-2020.

The Income Tax Department claimed it had received intelligence from the Directorate General of GST Intelligence that Vedanta wrongfully availed ITC, without actual receipt of goods at the declared place of business.

The background is that Vedanta entered into a transaction for the sale of copper concentrate during the period when its copper plant at Tuticorin was closed down due to environmental concerns.

According to the Income Tax Department, there was bogus ITC amounting to more than Rs. 424 crore which was availed of.

Vedanta's counsel however brought to the Court's notice an order passed by the Additional Commissioner, GST and Central Excise, wherein the main issue in respect of availment of ITC was closed by the GST Department.

The entire basis of the impugned notice was the aforesaid transaction, in respect of which proceedings have already been closed by the GST Department, Vedanta argued.

Agreeing, the Court permitted the company to place the GST order before the ACIT, for reconsideration of the reassessment action within 3 months.

Appearance: Ms. Pragyan Pradip Sharma, Sr. Adv. with Mr. Divyanshu Agrawal, Mr. Vaibhav Niti, Mr. Hardik Jain, Mr. Vaibhav Niti & Mr. Rachit Sharma, Advs for Petitioner; Mr. Ruchir Bhatia, SSC with Mr. Anant Mann & Mr. Abhishek Anand, Advs. for IT Dept

Case title: M/s Vedanta Ltd v. ACIT Delhi

Citation: 2025 LiveLaw (Del) 1472

Case no.: W.P.(C) 16378/2025

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