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2024 (5) TMI 976 - HC - GSTIssues Involved: 1. Quashing of the order dated 16.07.2021 by the Deputy Commissioner, Commercial Tax. 2. Validity of the order dated 10.04.2024 by Additional Commissioner dismissing the appeal. 3. Legitimacy of the petitioner's claim for Input Tax Credit (ITC). Summary: Issue 1: Quashing of the Order Dated 16.07.2021 The petitioner sought to quash the order dated 16.07.2021, which imposed tax liability and penalty on the grounds of false input tax credit. The Deputy Commissioner, Commercial Tax, found that the petitioner fraudulently claimed ITC based on fake invoices from non-existent firms, namely M/s Ridhi Sidhi Enterprises, M/s Siddhartha Trading Company, and M/s Satvik Enterprises. Issue 2: Validity of the Order Dated 10.04.2024 The petitioner challenged the order dated 10.04.2024 by the Additional Commissioner, which dismissed the appeal against the order dated 16.07.2021. The appellate authority upheld the adjudicating authority's findings that the petitioner had shown false inward supplies and claimed ITC fraudulently. The evidence provided by the petitioner, such as goods receipts and transport Bilties, was found to be fabricated. Issue 3: Legitimacy of the Petitioner's Claim for ITC The petitioner argued that they had fulfilled all requirements u/s 16(2) of the GST Act, 2017, and u/r 36 of GST Rules, 2007, for claiming ITC. The petitioner relied on the Delhi High Court's decision in On Quest Merchandising India Pvt. Ltd. vs. Government of NCT of Delhi, which held that bona fide purchasing dealers should not be penalized for the selling dealer's failure to deposit tax. However, the court found that the petitioner had not actually received any goods and had engaged in paper transactions with non-existent firms. The Special Investigation Branch's findings supported the adjudicating authority's decision to deny ITC and impose penalties. Conclusion: The court dismissed the writ petition, stating that fraud vitiates even the most solemn proceedings. The findings of the Special Investigation Branch provided sufficient material to support the orders passed by the adjudicating and appellate authorities. The petitioner's claim for ITC was deemed fraudulent, and the penalties and liabilities imposed were upheld.
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