Top Stories Complete Case Digest on Wrongful Availment of ITC By Aiswarya Krishnadas – On June 26, 2024 8:03 am – 32 mins read As per the GST provisions, if an entity wrongly avails Input Tax Credit ( ITC ) but hasn’t utilised it, it must reverse the credit along with interest within a specific period. Failing to do so may lead to penalty proceedings. Penalty Amount: If you have wrongly availed and utilised the ITC, the penalty can range up to 100% of the ITC amount availed or INR 10,000, whichever is higher. Wrongful availment of ITC: Rajasthan HC refuses to grant Bail to accused of GST Scam worth Rs. 47 Cr The Rajasthan High Court refused to grant bail to the person accused of wrongly availing ITC without the transportation of goods. The petitioner, Sumit Dutta, was an employee in M/s Veto Merchandise and resigned in February 2020. It is also contended that petitioner has also furnished details to establish that there was actual movement of the goods. It is further contended that co-accused Bhasker Jangir has been given the benefit of bail by this Court. It is contended that offence is punishable by five years imprisonment and is triable by Magistrate. The single judge bench of Justice Pankaj Bhandari while upholding the contention of the public prosecutor  rejected the bail application. Madras HC Orders 10% Pre-deposit for Reconsideration of GST Demand Arising from Wrongful ITC Claim Amid Non-Response to SCN & Personal Hearing M/s.Navbharat Boilers vs Assistant Commissioner CITATION: 2024 TAXSCAN (HC) 1003

The Madras High Court mandated 10% pre-deposit of disputed tax for the reconsideration of the Goods and Services Tax ( GST ) demand arising from the wrongful availment of Input tax Credit ( ITC ) amid non-response to the Show Cause Notice ( SCN ) and Personal hearing. Therefore, the impugned order dated 16.08.2023 was  set aside, and the matter is remanded for reconsideration by the Single bench of Justice Senthilkumar Ramamoorthy on a 10% pre-deposit of the disputed tax demand within two weeks and submitting a reply to the show cause notice within the same period. Wrongful availment of ITC: Rajasthan High Court refuses to grant Bail to Chartered Accountant involved in GST Scam Abhishek Singhal vs Union Of India CITATION: 2021 TAXSCAN (HC) 669 The Rajasthan High Court refused to grant bail to the CA for allegedly availing wrongful ITC by creating as many as 38 fake firms. Mr. Mr. JatinHarjai Counsel for the petitioner, submits that the petitioner, Abhishek Singhal has been falsely implicated in this matter and the petitioner is a chartered accountant by profession and he is not liable for the offences committed by co-accused persons. Counsel further submits that the maximum sentence for the offences alleged against the petitioner is five years and the petitioner is in custody since February 19, 2021 and conclusion of trial may take a long time. The Single Judge Bench of Justice Indrajeet Singh dismissed the bail application on the grounds that the petitioner failed to appear before the Department while notices were issued to him, and even after filing a complaint before the Trial court, he remained absconded for about one year and thirdly, the petitioner is a chartered accountant, who is the mastermind of the crime and he has created 38 fake firms and availed ITC wrongfully to the tune of Rs.6,36,32,492/-. GST: Patiala House Court grants Anticipatory Bail to top management of Milkfood alleged of wrongful availment of ITC on deposit of 10 Cr The Patiala House Court granted anticipatory bail to top management of Milkfood on deposit of 10 Crores, Rs.4.5 has already been deposited out of Rs.85.4 Crores It has been alleged that on investigation it was revealed that fictitious firms were engaged in generating and passing on fake input tax credit (ITC) by issuing bogus invoices without actually supplying goods.

The court consisting of a Roaster Judge, Sanjay Khanagwal held that in the event of arrest of the applicants namely Naval Kumar, Sanjeev Kothiala, Harmesh Mohan Sood, and Sudhir Awasthi, they be released on bail on furnishing personal bond in the sum of Rs.2 lakhs each with surety of like amount to the satisfaction of IO/Commissioner, GST subject to the various conditions. Rajasthan HC grants Bail to person accused of Wrongful Availment of ITC The High Court of Rajasthan while keeping in view that the petitioners are already in jail for 450 days and no further investigation or recovery is to be made for the purpose of the case granted bail to the petitioner accused of wrongful availment of Input Tax Credit (ITC) under Section 132 (1)(b)(c)(f)(j) and (I) of the Central Goods and Service Tax (CGST) Act, 2017. The single-judge bench of Justice Sanjeev Prakash Sharma while keeping in view that the petitioners are already in jail for 450 days and no further investigation or recovery is to be made for the purpose of the case granted bail to the petitioner accused of wrongful availment of Input Tax Credit under Section 132 (1)(b)(c)(f)(j) and (I) of the Central Goods and Service Tax (CGST) Act, 2017. GST: Rajasthan HC grants bail to persons accused of wrongful availment of ITC by creating fake firms Sandeep Goyal vs Union of India CITATION: 2020 TAXSCAN (HC) 153 The Rajasthan High Court granted bail to the person accused of wrongful availment of Input Tax Credit (ITC) by creating fake firms.

The single judge bench of Justice Sabina held that although in the present case allegations levelled against the petitioners are serious in nature but the fact remains that the petitioners are in custody for the last more than two years and admittedly maximum punishment to be imposed on the accused, if convicted, is five years. Complaint in the present case was filed in the year 2018, whereas, the investigation has been concluded in July, 2020. GST Evasion: Swiggy gets Notice for Wrongful Availment of ITC In a case on alleged GST evasion of wrongful availment of input tax credit to the tune of Rs 27.2 crore, the Director-General of GST Intelligence (DGGI), Hyderabad has issued a notice to the operator of food delivery app Swiggy. BTPL has availed and utilized input tax credit on input services commonly used for its online marketplace services (which attract 5% GST without input tax credit) as well as taxable services but it has not reversed the proportionate input tax credit corresponding to private and cloud kitchens,” the DGGI explained. Gujarat HC allows Bail in wrongful availment of ITC Case The Gujarat High Court has allowed the bail application in the case of the wrongful availment of Input Tax Credit (ITC). The Single Judge Bench of the Gujarat High Court consisting of Justice Umesh A. Trivedi allowed the application for bail in the case of the wrongful availment of Input Tax Credit (ITC) on the condition that the applicant shall not misuse his liberty, surrender the passport, do not hamper the interest of the prosecution, mark presence on every Monday, do not leave India before the prior permission, furnish the residential address, etc.

Karnataka HC grants Anticipatory Bail to Person alleged of Wrongful Availment of ITC The High Court of Karnataka granted the anticipatory bail to the petitioner alleged to have involved in fraudulent availment of Input Tax Credit (ITC) on the basis of invoices without actual supply of goods in contravention of Section 16 of the CGST Act and caused loss to the exchequer for Rs.9.05 crore approximately. The single-judge bench of Justice K. Natarajan granted the anticipatory bail to the petitioner alleged to have involved in fraudulent availment of Input Tax Credit (ITC) on the basis of invoices without actual supply of goods in contravention of Section 16 of the CGST Act and caused loss to the exchequer for Rs.9.05 crore approximately. Wrongful availment of ITC: GST Dept moves Delhi Court to remand Accused Persons The GST Department prayed before the  Delhi Court to remand persons alleged of wrongfully claiming ITC in Judicial Custody for 14 days. Therefore, the department urged that economic offences are offences that corrodes the fabric of democracy and are committed with total disregard to the rights and interest of the nation and are committed by breach of trust and faith and are against the national economy and national interest. GST Evasion: Chhattisgarh HC grants Bail to person accused of wrongful availment of ITC Rohan Tanna vs Union of India CITATION: 2021 TAXSCAN (HC) 109 The Chhattisgarh High Court granted bail to the person accused of wrongful availment of Input Tax Credit (ITC). The Single bench of Justice Parth Prateem Sahu held that applicants are arrested for commission of offences punishable under Sections 16 & 132 (1) (b) & (c) of the GST Act. Section 138 of the GST Act deals with compounding of offences. Offence registered against applicants under Section 132 (1) of the GST Act is made compoundable by the Commissioner on making payment to the Central Government or State Government either before or after institution of prosecution. In the case at hand, a case is instituted against applicants and they are arrested. Gujarat HC Grants bail for wrongful availment of ITC beyond Rs.5 cr The Gujarat High Court has granted regular bail for wrongful availment of the Input Tax Credit(ITC) is beyond Rs.5 crores.

The applicant is arrested on 21st January 2020 and almost 52 days are over and the complaint is yet not filed against him by the Officer concerned. The bench observed the facts of the case, nature of allegations, the gravity of offences, the role attributed to the accused, without discussing the evidence in detail and opined that this case to exercise the discretion and enlarge the applicant on regular bail. In the light of judgement by the Apex Court in the case of Sanjay Chandra Vs. Central Bureau of Investigation, the bench granted regular bail for the applicant. GST: Jharkhand High Court quashes SCN on wrongful availment of ITC as it was vague, lacked details M/s Nkas Services Private Limited. vs The State of Jharkhand CITATION: 2021 TAXSCAN (HC) 499 The Jharkhand High Court quashed the Show Cause Notice in respect of wrongful availment of Input Tax Credit (ITC) as it was vague and lacked details. The division bench of Justice Aparesh Kumar Singh and Justice Anubha Rawat Choudhary noted that the impugned show-cause notice does not fulfill the ingredients of proper show-cause notice and thus amounts to a violation of principles of natural justice, the challenge is entertainable in the exercise of writ jurisdiction of this Court. Rajasthan HC denies Bail to person alleged for Wrongful availment of ITC until Investigation is complete The High Court of Rajasthan has rejected the bail application of the person accused of wrongful availment of Input Tax Credit (ITC) until the investigation is complete. The court directed that investigation be completed within a period of three months from that day and in case investigation is not completed within three months, then the petitioner therein is released on bail by the trial court by imposing appropriate terms and conditions. The single-judge bench of Justice Sabina, while adhering to the decision of the Apex Court in the case of Co-accused Sandeep Goyal has not granted bail to him and has directed that investigation be completed within a period of three months from that day and in case investigation is not completed within three months, then the petitioner therein is released on bail by the trial court by imposing appropriate terms and conditions.

No Details on wrongful Availment of ITC in SCN: Delhi HC modifies Retrospective Cancellation of GST Registration M/S SHUBH BALL BEARINGS COMPANY vs THE ASSISTANT COMMISSIONER CITATION: 2024 TAXSCAN (HC) 446 The Delhi High Court set aside retrospective cancellation of Goods and Service Tax ( GST ) registration.  The show cause notice is ex facie defective as the same does not contain any details or quantum of wrongful availment of Input Tax Credit or any refund claimed on the said account or reasons. Since both the petitioner and the respondent want the GST registration to be cancelled, though, for different reasons, the division bench comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja modified the order of cancellation to the extent that the same shall operate with effect from 01.02.2021, i.e., the date on which the petitioner discontinued business. Chandigarh Court refuses to transit the remand of Applicant accused of Wrongful Availment of ITC to Court of CMM in New Delhi The Chandigarh Court has refused to  transit the remand of Applicant accused of Wrongful Availment of ITC to the Court of Chief Metropolitan Magistrate (CMM) in New Delhi. The Chief Judicial Magistrate, Aman Inder Singh while rejecting the application ruled that all the individual transactions which amount to offence under the GST Act, 2017 are in fact multiple transactions arising out of a single pan India scheme of violating the provisions of GST Act, 2017 with a view to deprive the exchequer of crores of rupees of revenue. The individual transactions are not independent transactions. These are inseparable emanations of a single criminal conspiracy and plan. It, therefore leaves no doubt in my mind that the offences alleged in the instant matter have been committed in all the territorial jurisdictions where ITC’s were wrongfully and illegally sent Wrongful Availment of ITC: Gujarat HC Orders to Continue Provisional Attachment Till Conclusion of Adjudication Proceedings MADHAV COPPER LIMITED vs STATE OF GUJARAT CITATION: 2023 TAXSCAN (HC) 719 In a case of wrongful availment of ITC, the Gujarat High Court ordered to continue provisional attachment till the conclusion of the adjudication proceedings.

A two-judge bench comprising Justice N V Anjaria and Justice Devan M Desai directed the authorities to complete the adjudication proceedings within six weeks. Further directed the competent GST authorities to proceed to adjudicate the show cause notice after giving reasonable opportunity to the petitioner including filing a reply to defend its case, within a time-bound period. GST: Gujarat HC orders further Investigation on Provisional Release of Goods as there is an alleged wrongful availment of ITC MADHAV COPPER LIMITED vs STATE OF GUJARAT CITATION: 2021 TAXSCAN (HC) 139 The Gujarat High Court  ordered further investigation in respect of provisional release of goods as there is an alleged wrongful availment of Input Tax Credit (ITC). The division bench of Justice Sonia Gokani and Justice Nisha M.Thakore held that so far as the operating of the current account in Bank of Baroda, the credit of the ITC worth Rs. 3 Crores and unlocking of the same, no order is presently needed to be passed. The same is urged before the respondent already and the same shall be considered by the concerned authority at the time of adjudication Penalty u/s 27(4)  not Invokable in Absence of Findings of Wrong Availment of ITC: Madras HC T.V.Sundram Iyengar and Sons Limited vs The Assistant Commissioner (ST) CITATION: 2024 TAXSCAN (HC) 201 The Madras High Court has held that a 300% Penalty by invoking Section 27(2) of the Tamil Nadu Value Added Tax Act, 2006 (TNVAT) cannot be imposed when there are no findings regarding wrong availment of Input Tax Credit (ITC). A Single bench of Justice S Srimathy held that invoking section 27(4) read with 27(2) penalty cannot be imposed.  Moreover, the penalty cannot be imposed automatically. Some criminalities ought to be in existence to impose penalty and the framing of proof required for imposition of penalty is different from and much higher than i.e., required for framing the best Judgment demand assessment. The Court quashed the impugned order. GST Evasion: Punjab and Haryana HC refuses Anticipatory Bail to person accused of Wrongful Availment of ITC Hema Garg and another vs State of Haryana and another CITATION: 2021 TAXSCAN (HC) 272 The Punjab and Haryana High Court refused to grant  Anticipatory Bail to persons accused of Wrongful Availment of Input Tax Credit (ITC).

The Single Judge Bench of Justice Arvind Singh Sangwan while dismissing the petition held that the petitioners have failed to appear before the authorities, which has issued the notices, as they are involved in availing and utilizing wrongful input tax credit on the strength of invoices and E-way bills, which are issued from the non-existent and suspicious firms and further passed on input tax credit to various taxpayers throughout the country, thereby causing huge loss to the State Exchequer. Delhi HC directs DGGI to conclude investigation within 3 months in case of wrongful availment of ITC The High Court of Delhi, keeping in view the serious allegations of wrongful availment of Input Tax Credit (ITC) directed the Directorate General of Goods and Services Tax Intelligence (DGGI) as well as the Commissioner of CGST, Delhi to conclude the investigation in the present case within a period of three months The Division Bench of Justice Manmohan and Justice Sanjeev Narula keeping in view the serious allegations of wrongful availment of Input Tax Credit (ITC) directed the Directorate General of Goods and Services Tax Intelligence (DGGI) as well as the Commissioner of CGST, Delhi to conclude the investigation in the present case within a period of three months Madras HC directs Tobacco Dealer to Appellate Authority on alleged wrong availment of ITC as per Rule of Alternate Remedy Tvl.F.M.Sales & Marketing vs The State Tax Officer CITATION: 2021 TAXSCAN (HC) 197 The Madras High Court  directed the  tobacco dealer to Appellate Authority  as per the Rule of Alternate Remedy. The single bench of Justice M.Sundar held that there is no disputation or disagreement that the impugned order is appealable. In other words, statutory appeal qua impugned order is available to the writ petitioner, which will be under Section 51 of TNVAT Act. Interim Bail can’t be treated as constructive Custody: Allahabad HC refuses default Bail to person accused of Wrongful Availment of ITC Vishal Gupta vs Union Of India And Another CITATION: 2021 TAXSCAN (HC) 207 The Allahabad High Court while refusing the bail to a person accused of Wrongful Availment of Input Tax Credit (ITC) held that interim Bail cannot be treated as constructive custody.

The single-judge bench of Justice Anil Kumar Ojha observed that custody means when a police officer arrests a person, produces him before the Magistrate and gets a remand to judicial or other custody, he can be stated in judicial custody when he surrenders before the court and submits to its directions GST: Chhattisgarh HC grants Bail to Accused after 9 Months, Says Wrongful Availment of ITC is a Bailable and Compoundable Offense Subhash Chouhan vs Union Of India CITATION: 2022 TAXSCAN (HC) 493 In a ruling granting bail to an accused person involved in a GST scam of around 7 crores, the Chhattisgarh High Court has held that the accused shall be released on bail since the offence of wrongful availment of input tax credit under section 138 of CGST Act, 2017 is a bailable, non-cognizable and compoundable offence. Considering the submissions of the parties, Justice Deepak Kumar Tiwari observed that “particularly considering the fact that the allegation against the present applicant is of wrongfully utilizing Input Tax Credit of Rs.6,95,32,472/- and supplied taxable goods without payment of taxes and without issuing invoices to the tune of Rs.27,70,559/-, totalling Rs.7,23,03,031/-, and that offence under the Act are bailable and non-cognizable except for the offence under Section 132 (5) of the Act, further considering that the applicant can be punished with maximum sentence of 5 years with fine, he is in jail since 27.10.2021, further considering that Proprietor of the firm namely, Rohan Tanna and Abhishek Pandey have already been enlarged on bail by the co-ordinate Bench and also considering that the applicant in the bail application raised a ground that the offence is compoundable in nature and, therefore, this Court after considering all the aspects of the matter, particularly the period of detention and the amount involved finds appropriate that if the applicant deposits Rs.70 lakhs under protest or admission of the disputed amount, which would be adjusted in accordance with law, the applicant can be enlarged on bail.” GST Evasion: Patiala House Court refuses Bail to person accused of Wrongful availment of ITC worth Rs.55.9 Cr The Patiala House Court refused to grant bail to a person accused of Wrongful availment of Input Tax Credit (ITC) worth Rs.55.9 Crores.

The Chief Metropolitan Magistrate Dr. Pankaj Sharma while refusing to grant bail observed that the investigation, in this case, is at a nascent stage and three co-accused persons are still absconding as such the apprehension of the prosecution regarding tampering with the evidence or influencing witnesses appears to be reasonable. The facts so presented by the prosecution make out a case of necessity for further detention for the purpose of proper investigation. Accordingly, in the given facts and circumstances, no ground is made out for a grant of bail at this stage. GST Evasion: Punjab & Haryana HC grants Interim Bail to Person accused of wrongful availment of ITC without Supplying Goods or Services SEEMA JAIN vs JOINT COMMISSIONER CENTRAL GOODS AND SERVICE TAX CITATION: 2021 TAXSCAN (HC) 365 The  Punjab & Haryana High Court granted interim bail to a person accused of wrongful availment of Input Tax Credit (ITC) without supplying Goods or Services. The single judge bench of Justice Arvind Singh Sanghwan while listing the matter on August 24, 2021 said that meanwhile, in the event of arrest, the petitioner be released on interim bail subject to her furnishing personal bonds and surety to the satisfaction of Arresting/Investigating Officer. However, the petitioner shall join the investigation as and when called upon to do so and shall abide by the conditions as provided under Section 438 (2) Cr.P.C. GST Evasion: Chennai Court refuses to grant Bail to person accused of wrongful availment of ITC Exceeding Rs.5 Cr The petitioner/accused, Yasar Arabat was arrested by the respondent and remanded to judicial custody on 10.01.2022 for the alleged offence under section 132 (1) (ii) of the CGST Act, 2017. He is innocent of the said commission of the offence. He undertakes to cooperate with the respondent in the investigation. He assures that he will not tamper with any of the witnesses. He undertakes to appear regularly whenever and wherever he is ordered to do so by this Court.

He seeks to enlarge him on bail. Here it is to be emphasised that non implication of other accused and his illness would hardly be of any help to the accused. No infirmities as alleged in the procedure of arrest. The contention of the learned counsel for the petitioner/accused that the State authorities have no right to add the CGST tax evasion is quite untenable. The investigation is still in the nascent stage. Other persons involved in the racket is yet to be arrested. Prima facic complicity of the petitioner/accused in the crime is established. Release of the accused at this stage would hamper the investigation. Hence this Court is not inclined to allow the present petition,” the court said. Tax Liability Confirmed due to Wrong availment of ITC and and failure to reply SCN: Madras HC sets aside Order on 10% Pre-deposit M/s. Sebon Creations vs The Assistant Commissioner (ST) CITATION: 2024 TAXSCAN (HC) 988 The Madras High Court recently overturned a Goods and Services Tax ( GST ) order, requiring a pre-deposit of 10%. The order had confirmed the tax liability based on alleged wrongful availment of Input Tax Credit ( ITC ) and failure to respond to the Show Cause Notice ( SN ). The matter was remanded for reconsideration. A Single bench of Justice Senthilkumar Ramamoorthy set aside impugned order and the matter is remanded for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand within two weeks from the date of receipt of a copy of this order. The petitioner was also permitted to submit a reply to the show cause notice within the aforesaid period. GST Evasion: Delhi HC stays Order rejecting Bail of person accused of wrongful availment of ITC worth Rs.27.05 Crores AMIT GUPTA vs DIRECTORATE GENERAL OF GST INTELLIGENCE HEADQUARTERS CITATION: 2021 TAXSCAN (HC) 303 The Delhi High Court stayed the order rejecting the Bail of a person accused of wrongful availment of Input Tax Credit (ITC) worth Rs.27.05 Crores.

The Single Judge bench of Justice Mukta Gupta noted that the petitioner appears to have availed ITC worth more than ₹212 crores in M/s Brilliant Metals Pvt. Ltd., more than ₹21 crores in M/s Progressive Alloys India Pvt. Ltd., and more than ₹27 crores in M/s JBN Impex Pvt. Ltd. totaling to ₹260 crores availment. To date, the case of the respondent is that the petitioner has availed ineligible ITCs to the tune of ₹27.05 crores, thereby implying that at the moment there is no material before the respondent that ITC’s worth around 233 crores are also fraudulent. GST Evasion: Orissa HC refuses to grant Bail to person alleged of wrongful availment of ITC without actually Supply of Goods, Services Santosh Kumar Gupta vs Union of India & Another CITATION: 2021 TAXSCAN (HC) 314 The Orissa High Court refused to grant Bail to a person alleged of wrongful availment of Input Tax Credit (ITC) without actually supplying goods and services. The single judge bench of Justice D. Dash while refusing to grant bail held that the petitioner stands in the direction of making unlawful financial gain by putting up the show that for such sincere involvement in business and carrying out the same, his entitlement to the huge sum as an incentive in the form of Input Tax Credit (ITC) flowed which he received having the tendency of foiling the entire move in introducing this new Tax Regime. Bail Condition to Deposit of 70 Lakhs for wrongful availment of ITC based on FIR is invalid, no legal liability proven on GST Liability: Supreme Court SUBHASH CHOUHAN vs UNION OF INDIA & ANR CITATION: 2023 TAXSCAN (SC) 111 A two-judge bench of the Supreme Court has recently struck down the condition to deposit 70 Lakh Rupees, in bail granted to an accused allegedly involved in a GST scam of around 7 Crore Rupees.

The petitioner, through Himanshu Tyagi, Poonam Sharma and Moksh Tyagi, challenged the same in the Apex Court in a Criminal Appeal, contending that there was no final assessment in this regard under the Goods and Services Tax (GST) Act. ASG K M Nataraj appearing for the Union of India/State has stated that such a condition cannot be imposed while granting bail. The Supreme Court Bench held that the condition directing the appellant to deposit a sum of Rs. 70 Lakhs is not liable to be sustained and set aside the condition, leaving the other bail conditions intact, as per the facts and circumstances of the case. GST Evasion: Chhattisgarh HC refuses Bail to persons alleged of wrongful availment of ITC on basis of fictitious transactions worth Rs. 258 Cr Paritosh Kumar Singh Alias Diwakar Choudhary vs State Of Chhattisgarh CITATION: 2021 TAXSCAN (HC) 214 The Chhattisgarh High Court refused to grant the bail to persons alleged of wrongful availment of Input Tax Credit (ITC) on the basis of fictitious transactions worth Rs. 258 Crores. The single judge bench of Justice Narendra Kumar Vyas held that complaint has been filed within 60 days of their arrest which is within the time prescribed for filing of complaint to entitle or disentitle the accused persons for default bail. As the complaint has been filed within 60 days, therefore, on this count also, the petitioners are not entitled to get default bail . GST Evasion: Meerut Court denies Bail to person accused of Wrongfully availing ITC to tune of Rs.159.20 Cr The Meerut Court refused to grant bail to a person accused of wrongfully availing ITC to the tune of Rs.159.20 Crores. The applicant is sole mastermind and responsible for every act of himself. Suffice to say prima-facie, the accused has committed an economic offence and caused monetary loss to the State which is most harmful.

There is a possibility to be tampered with the evidence and tempered with the witnesses if the applicant is released on bail,” the court said. Extension of Time Limit to Pass Demand Order u/s 73(10) for Wrongful Availment of ITC under CGST Act: Punjab and Haryana HC issues notice COMMISSIONER, CENTRAL EXCISE, AHMEDABAD-III vs GUJARAT STATE PETRONET LTD. CITATION: 2024 TAXSCAN (HC) 251 The Punjab and Haryana High Court issued notice in the matter regarding the extension of time limit to pass demand order under Section 73(10) for wrongful availment of input tax credit (ITC) under the Central Goods and Service Tax Act, 2017 (CGST Act). A Division Bench comprising Justices GS Sandhawalia and Lapita Banerji observed that “It is accordingly, submitted that the show cause notices dated 27.12.2023 now issued would be time barred and thus, he has distinguished the earlier set of cases wherein stay was not granted. Notice of motion. Mr. Saurabh Kapoor, Addl.A.G. Punjab accepts notice on behalf of respondents No.1, 3 & 4 and prays for time to file reply. To come up for service of respondents No.2, 5 & 6 by way of dasti process for 25.01.2024. In the meantime, proceedings may carry on but the final order may not be passed.” GST: Delhi District Court refuses to grant bail to person accused of wrongfully availing ITC of more than Rs.10 Cr The Delhi District Court refused to grant bail to a person accused of wrongfully availing Input Tax Credit (ITC) of more than Rs.10 Crores.

The Coram consisting of Special Judge, Ajay Kumar Jain observed that there is a specific evaluation for availing fraudulent ITC of more than Rs.10 crores from various bogus firms which are non existent and there is likelihood during investigation that other bogus firms will come on record so that this fraud will be much more than Rs.10 crores. If ITC wrongly availed exceeds Rs.5 crores it would be cognizable and non-bailable offence: Bombay HC dismisses bail application Yogesh Jagdish Kanodia vs The State of Maharashtra CITATION: 2021 TAXSCAN (HC) 442 The Bombay High Court while dismissing the bail application of the Yogesh Jagdish Kanodia held that if the Input Tax Credit (ITC) has been wrongly availed exceeds Rs.5 crores it would amount to a cognizable and non-bailable offense. The division judge bench of Justice Manish Pitale and Justice S.S. Shinde noted that the petitioner has not been able to make out a case for exercising jurisdiction of this court under Article 226 of the Constitution of India. Therefore, the prayers made in the present writ petition cannot be granted. Accordingly, the writ petition is dismissed. GST: Rajasthan HC grants Bail to person accused of wrongfully availing ITC on furnishing bail bond of Rs. 1 Lakh Subhash Chandra Tyagi vs Directorate General Of Goods And Service Tax, Intelligence CITATION: 2020 TAXSCAN (HC) 120 The Rajasthan High Court granted the bail to a person accused of wrongfully availing ITC on furnishing a bail bond of Rs. 1 Lakh.

The single-judge bench of Justice Mahendra Kumar Goyal while allowing the bail application directed that accused-petitioner Subhash Chandra Tyagi shall be released on bail, provided he furnishes a personal bond in the sum of Rs.1 Lakh together with two sureties in the sum of Rs.50,000 each to the satisfaction of the Trial Court with the stipulation that he shall comply with all the conditions laid down under Section 437(3) Cr. P.C. GST Evasion: Patiala House Court refuses to grant Bail to person accused of wrongfully availing ITC to tune of Rs.12.82 cr The Patiala House Court refused to grant the bail to a person accused of wrongfully availing the ITC to the tune of Rs.12.82 Crores The Chief Metropolitan Magistrate, Pankaj Sharma noted that the department could not interrogate him post his release on interim bail due to Covid-19. The fact that the accused has disobeyed the summons earlier and provided irrelevant material to the department indicates that he would jettison the ongoing investigation. Therefore, the court in the interest of fair investigation,refused to grant bail to the accused at this stage.

GST Officers Confirms Demand Claiming ITC wrongly availed on Commercial Vehicle Purchases: Madras HC orders Reconsideration M/s. Sri Uma Plastics vs .The Deputy State Tax Officer-2 CITATION: 2024 TAXSCAN (HC) 986 In a recent ruling, the Madras High Court set aside the Goods and Services Tax ( GST ) demand order which confirmed the demand claiming the Input Tax Credit ( ITC ) wrongly availed on the vehicle purchased for the commercial purposes. The matter was remanded for reconsideration. Examining the impugned order, Justice Senthilkumar Ramamoorthy presiding as the sole bench, clarified that the tax proposal revolved around the alleged wrongful availment of ITC concerning the purchase of a motor vehicle. Accordingly, the order was set aside and the matter is remanded for reconsideration. The petitioner was also permitted to submit a reply to the show cause notice within two weeks from the date of receipt of a copy of this order. Availment of lower ITC than Amount reflected in Auto-Populated GSTR 2A Return amounts to Non-Application of Mind: Madras HC Vijaykumar vs The State Tax Officer CITATION: 2024 TAXSCAN (HC) 595 A Single Bench of the Madras High Court observed that the availment of lower input tax credit ( ITC ) than amount reflected in auto-populated GSTR 2A Return amounts to non-application of mind.

The Court of Justice Senthil Kumar Ramamoorthy observed that “On perusal of the impugned assessment order, it is evident that the petitioner availed of a lower amount as ITC than the amount reflected in the auto-populated GSTR 2A return. In those circumstances, the conclusion that the petitioner wrongly availed of ITC indicates non application of mind. As regards the interest liability for belated filing of returns, the evidence on record reflects that the petitioner remitted sums of Rs.3,97,353/- each towards CGST and SGST on 06.03.2024. In these circumstances, the impugned order calls for interference.” Pay Interest only if wrongly availed ITC is utilised: Clarifies CBIC The Central Board of Indirect Taxes and Customs (CBIC), as part of the 6 years GST celebration has clarified that “Pay Interest only if wrongly availed ITC is utilised”. The CBIC, through this made the clarification on the payment of the interest. Furthermore, the CGST Rules, 2017 have been amended through Notification No. 14/2022-Central Tax on 5th July 2022 to provide guidelines for calculating interest under Section 50 of the CGST Act. Also, the Retrospective amendment has been made in Section 50 of CGST Act, 2017, with effect from 01.07.2017 to provide for payment of interest on the delayed payment of tax on net cash basis. This will facilitate the taxpayers and help in removing ambiguity and disputes regarding payment of interest on gross tax basis or net cash basis. Another update by the GST is that it has reduced the frequency of filing Form GST ITC-04. presently, taxpayers are required to file FORM GST ITC-04, on quarterly basis, containing details of all goods sent to job worker and received from job workers.

GST Evasion: Patiala House Court refuses to grants Bail to person accused of wrongfully claiming ITC The Patiala House Court has refused to grant bail to the person accused of wrongfully claiming Input Tax Credit (ITC). The accused, Praveen Jian has moved the second bail application. The accused has been transferred from the court of SCJM, Rohtak and all firms involved in the present case are registered in Delhi. The accused, Praveen Jian has moved the second bail application. The accused has been transferred from the court of SCJM, Rohtak and all firms involved in the present case are registered in Delhi. It is submitted that as per the JC application filed before Court, it is admitted by department applicant is neither the proprietor/partner/director/Authorized signatory/shareholder of any of the alleged firm/company and no invoice has been brought on record which bear the handwriting/signature of the applicant and also no banking transactions pointing out that applicant is a beneficiary of the alleged documents. GST Evasion: Gurugram Court refuses Bail to person accused of wrongfully availing ITC The Gurugram Court refused to grant Bail to a person accused of wrongfully availing Input Tax Credit (ITC). The Chief Judicial Magistrate, Anil Kaushik held that if a murder committed in the heat of moment upon passing being aroused, the economic offence is supposed to be committed with cool calculation and deliberately with an eye on personal profit regardless of the consequence of the community.

A disregard for the interest of the community can be manifested only at the cost of forfeiting the trust and faith of the community in the system to administer justice in an even handed manner without fear of criticism from the quarters which view white collar crimes with a permissive eye unmindful of the damage done to the national economy and national interest. GST: Gujarat High Court grants Bail to person accused of wrongfully availing ITC The Gujarat High Court granted the bail to the person accused of wrongfully availing Input Tax Credit (ITC). Firstly, not take undue advantage of liberty or misuse liberty. Secondly, not act in a manner injurious to the interest of the prosecution. Thirdly, surrender the passport, if any, to the lower court within a week. Fourthly, not leave India without prior permission of the concerned trial court. Lastly, furnish the present address of residence to the Investigating Officer and also to the Court at the time of execution of the bond and shall not change the residence without prior permission of the concerned trial court. GST Evasion: Bombay HC refuses Anticipatory Bail to the person accused of Wrongfully availing ITC Premprakash Laxminarayan Bansal vs The State of Maharashtra CITATION: 2021 TAXSCAN (HC) 253 The Bombay High Court refused to grant the  Anticipatory Bail to the person accused of Wrongfully availing Input Tax Credit (ITC). The single-judge bench of Justice Sandeep K. Shinde observed that in terms of GST, Input Tax Credit Rules, availing the Input Tax Credit Invoices issued by the supplier of the goods is a mandatory document.

Herein, the response of the Assistant Commissioner, CGST in clear terms says, that M/s. Bansal Traders has availed the ITC against Invoices No.106 and 107. Besides, the statements of the Manager of the Warehouse, owner of the trucks, and the statements of drivers, prima-facie, show that goods were delivered at the request of M/s. Bansal Traders to and at the godown premises of Sarfaraz. GST: Patiala House Court accepts bail plea of person accused of wrongfully availing ITC The Patiala House Court accepted the bail plea of a person accused of wrongfully availing Input Tax Credit (ITC). Accordingly in the considered view of this Court, the accused is entitled for bail subject to furnishing PB/SB in the sum of Rs. 5 lakhs with one surety in the like amount subject to various conditions. Firstly, the accused shall join the investigation as and when directed by the investigating agency Secondly, the accused shall not tamper with the evidence or influence the witnesses which will be examined by the department during investigation. Thirdly, accused shall not leave the country without the permission of the permission of the Court Fourthly, the accused shall not indulge in similar offence in future. Lastly, accused shall appear before the Court on each and every date of hearing. GST Evasion: Patiala House Court remands person accused of wrongfully availing ITC for judicial custody for 14 days The Patiala House Court has remanded the person accused of wrongfully Availing ITC for judicial custody for 14 days. The commissioner, Anupam Prakash ordered that Chirag Goel masterminded a deep-rooted conspiracy to defraud the Government and committed offenses specified under Section 132(1)(c) of the CGST Act, 2017 which are cognizable and non-bailable. He has been remanded to judicial custody by the Metropolitan Magistrate Patiala House Courts, New Delhi for a period of 14 days till October 26, 2021.

Further investigation in the case is in progress. Meerut Court refuses to grant Bail to person alleged of availing wrongful ITC by creating Fake Firms The Meerut Court refused to grant bail to a person alleged of availing wrongful Input Tax Credit (ITC) by creating fake firms. The additional sessions Judge while refusing to grant the bail held that the department after getting the information that the accused firm is involved in the supply of goods in UP and on the basis of the notification of the department as produced before this Court also seems to have the power to investigate the present case and since the offence relates to tax evasion and fall under the economic offence which does not fall in ordinary offence punishable up to 5 years imprisonment and such type of offences should not be considered liberally particularly in the manner in which the offence is alleged to have been committed by the accused and if in such type of offences accused is granted bail, there is every livelihood that the investigation of the case will be hampered. GST Evasion: Punjab and Haryana HC grants Bail to person accused of Wrongfully availing ITC The Punjab and Haryana High Court granted the interim bail to the person accused of wrongfully availing Input Tax Credit (ITC).

The single bench of Justice Jasgurpreet Singh Puri directed that the petitioner shall join the investigation and shall fully cooperate with the investigation process and on his doing so, the petitioner be released on interim bail subject to his furnishing personal bonds and surety to the satisfaction of Arresting/Investigating Officer. However, the petitioner shall continue to join the investigation as and when called upon to do so and shall abide by all the conditions as provided under Section 438(2) Cr.P.C. It is further directed that the petitioner shall forthwith deposit his passport, if any, with the SIT. GST Evasion: Rajasthan High Court grants Bail to person accused of wrongfully availing ITC Shailesh Chandra vs Dggi Jaipur Zonal Unit CITATION: 2021 TAXSCAN (HC) 517 The Rajasthan High Court granted bail to a person accused of wrongfully availing Input Tax Credit (ITC). The single-judge bench of Justice Pushpendra Singh Bhatti held that the proceedings is likely to take some time this Court deems it just and proper to grant bail to the accused petitioner under Section 439 Cr.P.C. on the condition that the Petitioner executes a personal bond in a sum of Rs.50,000/- with two sound and solvent sureties of Rs.25,000/- each to the satisfaction of learned trial court for his appearance before that court on each and every date of hearing and whenever called upon to do so till the completion of the trial. GST Evasion: Rajasthan High Court grants Bail to Person alleged of wrongfully availing ITC Manoj Vijay vs Union Of India CITATION: 2021 TAXSCAN (HC) 601 The Rajasthan High court granted bail to a person alleged of wrongfully availing Input Tax Credit (ITC).

The Single Judge Bench of Justice Mahendra Kumar Goyal allowed the bail applications on the condition that the petitioner shall furnish a personal bond in the sum of Rs.1,00,000/- together with two sureties in the sum of Rs.50,000/- each to the satisfaction of the trial court with the stipulation that they shall comply with all the conditions laid down under Section 437(3) Cr.P.C. GST: Patiala House Court grants bail to person accused of wrongfully availing ITC to the tune of 13.90 Cr The Patiala House Court granted the bail to the person accused of wrongfully availing Input Tax Credit (ITC) to the tune of 13.90 Crores. Firstly, the accused shall join the investigation as and when directed by the investigating agency. Secondly, the accused shall not tamper with the evidence or influence the witnesses which will be examined by the department during investigation. Thirdly, accused shall not leave the country without the permission of the Court and deposit his passport with the 10 within seven days. 4. That accused shall not indulge in similar offence in future. Lastly, accused shall appear before the Court on each and every date of hearing. Chhattisgarh HC grants Bail to person accused of Wrongfully availing ITC without Actual Supply of Goods Rohan Tanna vs Union of India CITATION: 2021 TAXSCAN (HC) 109

The Chhattisgarh High Court has granted bail to a person accused of Wrongfully availing Input Tax Credit (ITC) without actual supply of goods. The single bench of Justice Parth Prateem Sahu directed that applicants shall be released on regular bail on their furnishing a personal bond in the sum of Rs.1,00,000/- with one surety in the like sum to satisfaction of trial Court concerned on the conditions that they shall appear before the trial Court concerned regularly on each & every date unless exempted from appearance; they shall not, in any manner, tamper with prosecution witnesses; and if applicants are found involved in similar offence in future, it will be open for the State to apply for cancellation of bail. GST Evasion: Rajasthan High Court grants Bail to CA accused of creating Fictitious Firms, wrongfully availing ITC Bhagwan Sahay Gupta vs Union Of India CITATION: 2021 TAXSCAN (HC) 651 The Rajasthan High Court granted the bail to Chartered Accountant (CA) of creating 11 fictitious firms and wrongfully availing Input Tax Credit worth Rs. 146 Crores. The single judge bench of Justice Pankaj Bhandari noted that Chartered Accountant has remained in custody for a period of one year and five months and that petitioner is also having a child and also considering the contentions put forth by counsel for the petitioner, the court deemed it proper to allow the bail application.

GST Evasion: Court grants Bail to person accused of wrongfully availing ITC from Non-existent Firms The Sessions Court at Vapi granted bail to a person accused of wrongfully availing Input Tax Credit (ITC) from non-existent firms. The 3rd Additional Sessions Judge, Dharmender Singh observed that the offence is punishable up to 5 years, compoundable and triable by the Court of Magistrate. Admittedly, the complaint against the applicant-accused is yet to be filed. Further, the allegations against the applicant-accused are yet to be established during the trial and trial will take a long time. Thus, seeing the quantum of sentence an accused is likely to face, gravity of the offence, severity of punishment, the liberty of an individual being involved, the period of custody of the accused, this court is of the considered opinion that the applicant / accused is entitled for concession of regular bail in this case. GST Evasion: Orissa HC grants Bail to person alleged of Wrongfully availing and passing ITC in Name of Bogus Firms Smruti Ranjan Sahoo vs State of Odisha CITATION: 2021 TAXSCAN (HC) 145 The Orissa High Court granted bail to a person alleged of Wrongfully availing and passing Input Tax Credit (ITC) in the name of Bogus Firms.

The single bench of Justice D. Dash noted that about five months have passed since the detention of the Petitioner in custody and thus those stages of the investigation here appear to be over when it can be said that the Petitioner being enlarged on bail may stand on the way of proper investigation in collecting all the materials triggering derailment of investigation process with the possibility of the Petitioner influencing the witnesses and absconding on which scores there too stand no material particulars. Unaware of GST Proceedings on Wrongful ITC Availment: Madras HC remanded for Reconsideration on 10% Pre-deposit Condition Pranav Industries vs Office of the Assistant Commissioner CITATION: 2024 TAXSCAN (HC) 1278 The Madras High Court remanded the matter for reconsideration on 10% pre-deposit observing that the petitioner was not heard before GST ( Goods and Services Tax ) assessment order was issued because the petitioner did not reply to the show cause notice or avail of the personal hearing. The bench of Justice Senthilkmuar Ramamoorthy, examining the impugned order observed that the petitioner was not heard before such order was issued because the petitioner did not reply to the show cause notice or avail of the personal hearing.

Recognizing the necessity of affording the petitioner an opportunity to contest the tax demand on its merits, the court deemed it appropriate to set aside the impugned order, subject to certain conditions. Wrongful Denial of ITC under CGST Act: Kerala HC Dismisses Writ Petition on Availability of Statutory Remedy KURIAKOSE PARAPPOTTU BINU vs THE STATE TAX OFFICER CITATION: 2024 TAXSCAN (HC) 574 The Kerala High Court dismissed the writ petition on the availability of a statutory remedy under the Central Goods and Service Tax (CGST) Act, 2017. The appellant challenged the order wrongfully denying the Input Tax Credit (ITC) under the CGST Act. Justice Gopinath P viewed that Government Pleader is right in contending that, in the facts and circumstances of the case, it is for the petitioner to avail statutory remedies against the order. Since the petitioner is within time to file an appeal against the order, no further reliefs are required to be extended to the petitioner and the court dismissed the writ petition.

The petitioner was represented by Harisankar V Menon, Meera V Menon, R Sreejith K Krishna Achyuth Menon and Parvathy Menon Padmanathan K V. GST Evasion: Punjab & Haryana HC refuses Bail to person alleged of creating Fake Invoices and wrongfully availing ITC Manoj Bansal vs Director General of GST Intelligence (DGGI) CITATION: 2021 TAXSCAN (HC) 212 The Punjab and Haryana High Court refuses Bail to person alleged of creating fake invoices and wrongfully availing Input Tax Credit (ITC). The single judge bench of Justice Vikas Bahl noted that the petitioner has complied with the conditions as imposed in the detailed order vide which interim bail was granted to the petitioner and also the fact that the petitioner had been in custody from 07.12.2020 till 16.03.2021 and that the challan has already been filed before the Judicial Magistrate Ist Class and the proceedings under Section 74 of the CGST Act have also been initiated and the case is primarily based on documentary evidence, thus, no purpose would be served in sending the petitioner back into custody. Jharkhand HC Directs State GST Authorities to Proceed on Wrong ITC Availment Despite Summons Issued by DGGI and CGST Preventive Wing VIVEK NARSARIA vs The State of Jharkhand CITATION: 2024 TAXSCAN (HC) 227 The Jharkhand High Court, while disposing the writ application, directed the State Goods and Services Tax ( GST ) authorities to continue with proceedings on wrong Input Tax Credit (ITC) availment despite the summons issued by the Preventive Wing and Directorate General of GST Intelligence (DGGI) Wing of the Central Goods and Services Tax ( CGST ) The bench clearly expressed its hesitation to accept the argument that the DGGI had special powers compared to State GST Authorities, as both were engaged in investigating the same issues.

The court emphasized that the state proceedings, based on ‘Search & Seizure,’ were initiated prior in point of time, reinforcing the petitioner’s request. As a result, the bench instructed the Preventive Wing and DGGI to transfer all the investigations conducted to date to the State GST authorities. The State GST authorities will then proceed further against the petitioner in accordance with the law. GST Evasion: Gujarat HC refuses Anticipatory Bail to Directors of Company allegedly involved in wrongfully availing ITC on the basis of Fake Bills NILESHBHAI NATUBHAI PATEL vs THE STATE OF GUJARAT CITATION: 2021 TAXSCAN (HC) 204 The Gujarat High Court Gujarat HC refused the Anticipatory Bail to Directors of Company allegedly involved in wrongfully availing ITC on the basis of fake bills.

The single-judge bench of Justice Vipul M. Pancholi while refusing the anticipatory bail said that if the applicants are enlarged on anticipatory bail then, there are all chances that the applicants will tamper with the evidence and witnesses and at the time of trial, the applicants would not be available. GST Evasion: Rajkot Sessions Court allows Anticipatory Bail to person accused of wrongfully availing ITC worth Rs. 18.04 cr The Rajkot Sessions Court allowed the Anticipatory Bail to a person accused of wrongfully availing Input Tax Credit (ITC) worth Rs. 18.04 crores . Fourthly, the applicant shall not tamper with the evidence or threaten the witnesses or act in any manner prejudicial to the case of the prosecution. Fifthly, the applicant shall deposit an amount of Rs. 32 Lakhs before the respondent department i.e. DGGI within a period of four weeks from today. Sixthly, the applicant shall extend every possible cooperation in the investigation required by the investigating agencies and shall appear before the investigating agencies as and when required by it. GST Evasion: Orissa HC refuses to grant Bail to person accused of Wrongfully availing ITC without Actual Supply of Goods, Services Santosh Kumar Gupta vs Union of India & Another CITATION: 2021 TAXSCAN (HC) 314 The Orissa High Court refused to grant bail to a person accused of wrongfully availing ITC without actual supply of Goods and Services. The Single Judge Bench of Justice D.Dash while refusing to grant bail said that the Petitioner is said to have been involved in the commission of the above Economic offenses which are considered to be grave. Such dubious activities in committing offenses for making huge unlawful gain by causing huge loss to the State Exchequer is a step towards not only scuttling the process of development in the country but also in standing as a developed country in the globe in which our march is on.

GST Evasion: Gauhati HC refuses Bail to Tax Consultant for allegedly collecting Fake Invoices, E-Way Bills to wrongfully avail ITC SOURAV BAJORIA vs UNION OF INDIA CENTRAL GOODS AND SERVICE CITATION: 2021 TAXSCAN (HC) 238 The Gauhati High Court refused to grant the Bail to the Tax Consultant for allegedly collecting fake invoices, and E-way bills to wrongfully avail Input Tax Credit (ITC). The single-judge bench of Justice Hitesh Kumar Sarma while rejecting the bail application found that this complaint alleged a huge economic offense and therefore, a thorough and detailed investigation is essential. Further, considering the materials so far collected by the Investigating Agency in respect of manipulation of invoices, etc, and the role of this petitioner in facilitating the commission of the offense of huge tax evasion of Rs. 28,97,85,917/-, the enlargement of the petitioner on bail, at this stage, is likely to hamper the investigation and tamper evidence which may amount to compromising with the entire investigation of the case. GST Authorities Erroneously Debit wrongly availed ITC from ECL

Despite Subsequent Reversal in GSTR-3B: Madras HC quashes GST Assessment Order Vijayshanthi Hardware VS The Assistant Commissioner CITATION: 2024 TAXSCAN (HC) 705 The Madras High Court has quashed the Goods and Services Tax ( GST ) Assessment Order in the matter were the authorities debited the wrongly availed Input Tax Credit from Electronic Credit Ledger ( ECL ) subsequent to the reversal in the Goods and Services Tax Returns – 3B ( GSTR-3B ). The matter was remanded back for reconsideration. Upon careful examination, the bench of Justice Senthilkumar Ramamoorthy concluded that the impugned order had erroneously proceeded under the assumption that ITC had not been reversed. Consequently, the Court deemed it necessary to quash the order and remand the matter for reconsideration. The High Court granted the petitioner permission to respond to the SCN dated 19.04.2023 and to submit all pertinent documents alongside the response within a maximum period of two weeks from the date the petitioner receives a copy of the order. 100% Penalty imposed on wrong ITC availment u/s 74 GST Act without Recording Reasons: Madras HC remands for Reconsideration on 10% Pre-deposit M/s.Jayasri Traders vs The Assistant Commissioner CITATION: 2024 TAXSCAN (HC) 1326 In a recent ruling, the Madras High Court ruled the imposition of a 100% Goods and Services Tax ( GST ) penalty for erroneous Input Tax Credit ( ITC ) under Section 74 of the GST Act. The court noted with concern that the penalty was imposed without adequate reasons provided.

The bench of Justice Senthilkumar Ramamoorthy acknowledged evidence of payment amounting to Rs. 4,78,573/- for the wrongful ITC availment, citing a circular by the CBIC to argue against levying interest,  which was relied on by the petitioner. However, the examination of the impugned order revealed that while SGST and CGST dues were settled, the rationale for imposing a 100% penalty under Section 74 lacked clarity. ITC availed Details in GSTR 2A reconciled with GSTR 3B: Madras HC directs GST Dept to dispose of Rectification Petition within 1 Month Roshan Fruits India Pvt. Ltd vs Assistant Commissioner (ST) CITATION: 2024 TAXSCAN (HC) 957 In a recent ruling, the Madras High Court directed the Goods and Services Tax ( GST ) department to dispose of the Rectification Petition within 1 Month as the petitioner correctly submitted the reconciled GSTR 2A and GSTR 3B. A Single bench of Justice Senthilkumar Ramamoorthy disposed of the writ petition by instructing the respondent to consider and dispose of the rectification petition dated March 12, 2024, through a comprehensive order. The respondent has been directed to provide a reasonable opportunity, including a personal hearing, to the petitioner within 1 month.