TMI Blog2023 (12) TMI 292X X X X Extracts X X X X X X X X Extracts X X X X ..... h was found to be nonexistent at his principal place of business, has a direct link in forming the belief that the petitioner wrongfully availed of the ITC - there are no ground to declare any search or inspection conducted on 12.11.2022 as illegal or vitiated on the ground that there was no reason to believe that the petitioner had wrongfully availed the ITC. Thus, there are no merit in the petitioner s contention that the inspection conducted by the central officers were illegal. The provisions of Section 6(2)(b) of the CGST Act do not preclude the central officers from conducting an inspection for concluding an ongoing investigation merely because a prior inspection or search was conducted by the DGST authorities - the respondents are directed to refund the sum of ₹10,00,000/- deposited by the petitioner in FORM GST DRC-03 on 12.11.2022. Petition disposed off. - HON BLE MR JUSTICE VIBHU BAKHRU AND HON BLE MR JUSTICE AMIT MAHAJAN Advocates who appeared in this case: For the Petitioner : Mr. A. K. Babbar Mr. Surender Kumar, Advs. For the Respondents : Mr. Aditya Singla, SSC with Ms. Arushi Sharma, Adv. Mr. Asheesh Jain, CGSC with Mr. Gaurav Kumar Ms. Ankita Kedia Ms. Seema ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CGST and ₹5,00,000/- DGST). He claims that at about 9:00 pm, he was made to fill up FORM GST DRC-03 on the laptop carried by the officers of the visiting team. He claims that at the material time he was under the control of the officers of respondent no.3 and was interrogated on account of alleged inadmissible Input Tax Credit (hereafter ITC ) availed in respect of supplies purchased from one M/s Hari Om Chemicals. The petitioner claims that he was neither given the copy of the authorization nor was he informed of the reasons as to why the search was being conducted. The petitioner also claims that his statement was recorded but he was neither provided a copy of the statement nor the punchnama. 5. The learned counsel for the petitioner contends that the petitioner had sent a letter dated 14.11.2022, calling upon the respondents not to proceed further in view of Section 6(b)(2) of the CGST Act. He contends that the petitioner had also sought to retract the statement forcibly recorded on the said date. However, the petitioner has not been provided a copy of his statement as yet. 6. In the aforesaid context, the petitioner prays as under: a. Your Lordship may kindly, kindly cal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of high values in a short period of time. Investigations and enquiries were conducted which revealed that the registrations (GSTINS) of some of the taxpayers were cancelled or suspended, as they were found to be non-existent during physical verification conducted at their principal place of business. It is stated that one such firm is M/s Sai Polymers. The said concern had secured its registration on 14.03.2022 and that the same was cancelled suo motu. It is stated that summons were issued under Section 70 of the CGST Act to the said tax payer (M/s Sai Polymers) at its registered place of business but the same were returned with the remarks to the effect that no such firm / person existed at the said address. 8. It was found that one M/s Hari Om Chemicals had reportedly purchased supplies from M/s Sai Polymers and had availed the ITC in respect of such alleged purchases. The said firm (M/s Hari Om Chemicals) was also found to be non-existent at its registered place of business on verification conducted on 24.08.2022. The summons issued to the said taxpayer were also returned undelivered. It is averred that the registration of M/s Hari Om Chemicals was cancelled and that no one fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scount Co. Ltd. v. Income Tax Officer, Companies District I Calcutta Anr. (supra) is instructive in interpreting the said expression as used in Section 67 of the CGST Act as well. 13. The sufficiency of the reasons is not amenable to judicial review. So long as there is material or information, which supplies a rational basis for forming a belief that the conditions as stipulated under Section 67(1) of the CGST Act are satisfied, the search or inspection authorized under the said section cannot be faulted. 14. In Income Tax Officer, Calcutta Ors. v. Lakhmani Mewal Das: AIR 1976 SC 1753 , the Supreme Court had, in the context of Section 147 of the Income Tax Act, 1961, observed: 8. ..the reasons for formation of the belief must have a rational connection with or relevant bearing on the formation of the belief. Rational connection postulates that there must be a direct nexus or live link between the material coming to the notice of the Income-tax officer and the formation of his belief that there has been escapement of income of the assessee from assessment in the particular year because of his failure to disclose fully and truly all material facts. 15. In the present case, the infor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the authorization dated 11.11.2022 (in FORM GST INS-01). 21. It is apparent from the above that the central officers had conducted the inspection pursuant to an ongoing investigation in regard to creation of fake firms to fraudulently avail ITC. 22. In view of the above, we find no merit in the petitioner s contention that the inspection conducted by the central officers were illegal. The provisions of Section 6(2)(b) of the CGST Act do not preclude the central officers from conducting an inspection for concluding an ongoing investigation merely because a prior inspection or search was conducted by the DGST authorities. 23. Insofar as the petitioner s prayer that respondent no.3 be directed to supply a copy of the punchnama and the statement is concerned, no orders are required to be passed. This is because, according to the respondents, the petitioner s statement was not recorded. It is also not the petitioner s case that any goods or documents were seized from his premises under Section 67(2) of the CGST Act. 24. Insofar as the petitioner s claim that he was coerced to deposit a sum of ₹10,00,000/- is concerned, we find that the said issue is clearly covered by the decis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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