2021 (11) TMI 551 - HC - GST

Levy of penalty u/s 122(1)(ii) of TN-GST and C-GST Acts - offence of issuing invoice without supply of goods - HELD THAT - The issue decided in the case of 2021 (10) TMI 1122 - MADRAS HIGH COURT where it was held that Impugned order made by first respondent and consequential order being order made by second respondent are set aside solely on the ground that alleged misuse of writ petitioner's Aadhar and PAN Cards and obtaining of fraudulent registration is under investigation - petition disposed off.

Summary

Issues:
1. Challenge to an order dated 08.02.2021 under TN-GST and C-GST Acts.
2. Alleged misuse of Aadhar and PAN cards leading to fraudulent registration.
3. Lodging of a criminal complaint and investigation in progress.
4. Setting aside the impugned order without expressing any view on merits.
5. Preservation of rights for the Revenue to proceed based on investigation outcomes.

Analysis:

1. The writ petition challenged an order dated 08.02.2021 under TN-GST and C-GST Acts. The petitioner contended that someone misused their Aadhar and PAN cards for fake registration. The impugned order accused the taxable person of issuing invoices without goods supply. The petitioner consistently claimed innocence, evident from the impugned order's content, highlighting non-service of notices at the business address. The Court noted a criminal complaint by the petitioner and decided to set aside the impugned order pending investigation, preserving the Revenue's right to take action based on investigation results.

2. The central issue revolved around the alleged misuse of the petitioner's Aadhar and PAN cards for fraudulent registration. The petitioner maintained that their identity was misused to create a fictitious business entity. The Court acknowledged the seriousness of the matter, especially with an ongoing police investigation and the lodging of a FIR. Considering the petitioner's proactive steps and the pending investigation, the Court deemed it appropriate to quash the impugned order without prejudicing the case's merits, allowing the Revenue to act based on investigation findings.

3. The petitioner's decision to lodge a criminal complaint and the subsequent police investigation played a pivotal role in the Court's judgment. The FIR registered against the alleged offenses under IPC and IT Act indicated the petitioner's sincerity in addressing the fraudulent registration issue. The Court recognized the petitioner's bona fides in lodging the FIR and considered it a significant factor in setting aside the impugned order, emphasizing the importance of cooperation with law enforcement agencies in such matters.

4. The Court, while refraining from expressing any opinion on the case's merits, highlighted the need to respect the ongoing investigation's integrity. By setting aside the impugned order, the Court aimed to maintain the balance between judicial intervention and investigative processes. The decision underscored the importance of allowing the investigative authorities to uncover the truth regarding the alleged misuse of the petitioner's identity for fraudulent purposes, ensuring a fair and just resolution based on concrete findings.

5. The judgment concluded by outlining specific directives, including the preservation of both parties' limitations, the petitioner's obligation to provide investigation updates to the respondent, and the continuation of this process until the investigation's completion. By emphasizing transparency and cooperation between the parties, the Court sought to facilitate a thorough investigation while safeguarding the interests of all involved entities. The decision aimed to uphold the principles of justice and fairness throughout the investigative and legal proceedings.