2020 (3) TMI 64 - HC - GST

Input tax credit - bogus tax purchases - allegation is that the purchases made from the firms are bogus tax purchases and no input tax could have been availed on such bogus tax purchase - HELD THAT - The statute governing the field i.e. The Integrated Goods and Services Tax Act, 2017 r/w The Central Goods And Services Tax Rules, 2017, which provides for a complete mechanism in case of evasion of the tax and this contention is that the show-cause notice has been issued to the petitioner and the petitioner has filed a reply to the show-cause notice, hence it is a premature writ petition as no final order has been passed. As the statue is a complete code in itself, the respondents are yet to pass a final order, no case for interference is made out in the matter - The admission is declined.

Summary

Issues:
1. Allegation of bogus tax purchases and input tax availed.
2. Show-cause notice issuance and reply filed.
3. Prayers for directions and reliefs sought.
4. Statute governing tax evasion and appropriate action.
5. Premature writ petition due to no final order passed.
6. Complete code in The Central Goods And Services Tax Rules, 2017.

Analysis:
The petitioner, a GST registered entity, faced allegations of bogus tax purchases and improper input tax availed, leading to the issuance of a show-cause notice on 05.10.2019. Despite filing a reply to the notice, authorities conducted a raid. The petitioner sought directions for the adjudication of the notice, a personal hearing, and the opportunity for further submissions. Additionally, the petitioner requested that any consequential raid without considering submissions be deemed legally unsustainable. The plea included a prayer for appropriate writs or orders as deemed fit by the Hon'ble Court.

The learned Government Advocate referenced The Integrated Goods and Services Tax Act, 2017, along with The Central Goods And Services Tax Rules, 2017, highlighting the statutory provisions for addressing tax evasion. It was argued that as the petitioner had responded to the show-cause notice but no final order had been issued, the writ petition was premature. The advocate emphasized that the respondents were bound to follow the provisions of The Central Goods And Services Tax Rules, 2017, suggesting that appropriate action would be taken in due course.

Considering the statutory framework as a comprehensive code in itself, the Court declined admission to the case, noting that since no final order had been passed by the authorities, interference was unwarranted. The judgment underscored the importance of allowing the statutory process to unfold, indicating that the respondents were yet to make a final determination in the matter.