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2021 (11) TMI 230 - HC - GSTUtilization of ITC from dubious firms - bill trading and passing on fake ITC without movement of actual goods - HELD THAT - The Form GST DRC-01 issued against the petitioner by the respondent authorities on the premises that in the investigation the petitioner had not satisfied the authorities as regards the ITC they had relied upon and therefore, the authorities had arrived at a view that they had relied upon some dubious ITC for the purpose. As it is apparent that the said view was formed as because the petitioner had not provided appropriate material and document at the time of the investigation and therefore, such Form GST DRC-01 was issued, we are of the view that ends of justice would be met if an opportunity is given to the petitioner tax payer to appear before the respondent Joint Commissioner of State Taxes, Guwahati with all relevant materials that he may desire to rely upon and satisfy the authorities in their investigation pursuant to the earlier summons dated 10.09.2021. The reasoned order to be passed shall prevail and till such reasoned order is passed, the Form GST DRC-01 both dated 08.10.2021 shall be kept in abeyance. In the event, the reasoned order goes in favour of the petitioner it has to be understood that the said Form of GST DRC-01 will no longer remain effective and in the event it is against the petitioner, a fresh Form GST DRC-01 may be issued and in doing so adequate time required under the law shall be given to the petitioner before taking any action. Petition disposed off.
Issues:
Challenge to two communications dated 08.10.2021 regarding reversal of ITC from dubious firms and levy of interest and penalty under Assam GST Act 2017. Analysis: The petitioner challenged two communications dated 08.10.2021 seeking reversal of Input Tax Credit (ITC) from firms allegedly involved in bill trading and fake ITC passing without actual goods movement. The notices were issued under Rule 142(1)(a) of the AGST Rules. The petitioner contended that issuing notices based on media reports was improper, citing Supreme Court decisions. However, the notices also mentioned specific findings during investigation of the petitioner's use of dubious ITC forms. The court noted that a summon was issued on 10.09.2021 for further investigation, but the petitioner failed to appear on the scheduled date, leading to the issuance of the DRC-01 notice on 08.10.2021. The court emphasized the need for the petitioner to appear before the Joint Commissioner with relevant materials to address the investigation's concerns. A specific date of 08.11.2021 was set for the petitioner's appearance to present their case and evidence. The court directed the Joint Commissioner to issue a reasoned order after considering the petitioner's submissions, which would determine the fate of the DRC-01 notices dated 08.10.2021. If the order favored the petitioner, the notices would be ineffective, and if against, a fresh notice could be issued with due time for compliance. The court clarified that its observations should not influence the authorities, and a copy of the communication dated 27.10.2021 was to be retained on record. The writ petition was disposed of, and any interim orders were vacated.
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