2023 (9) TMI 994 - HC - GST

Fraudulent availment and passing of ineligible Input tax credit to numerous taxpayers - HELD THAT - Prima facie, the views of the Board regarding Rule 86-A(1)(a) and (c) of the Rules appears to be in order. The provisions do not permit the registered person to avail input tax credit on invoices or debit notes without actually receiving goods or services or both. Only Credit that is validly availed can be utilised for discharging the tax liability. This writ petition disposed off at the time of admission by permitting the petitioner to give a representation to the impugned Notice of Intimation dated 09.05.2023, within a period of 15 days from the date of receipt of a copy of this order.

Summary

Issues involved: Challenge to Notice of Intimation u/s 86-A(1)(a) and (c) of TNGST Rules, 2017 regarding locked credit due to alleged bogus purchases.

Summary:
The petitioner challenged the Notice of Intimation dated 09.05.2023, which locked credit of Rs. 37,18,106/- u/s 86-A(1)(a) and (c) of TNGST Rules, 2017 based on information that purchases from Tvl.Agni Traders were bogus. The petitioner relied on a letter from the Central Board of Indirect Taxes and Customs and a recent Delhi High Court decision. The Court found the Board's views on Rule 86-A(1)(a) and (c) valid and directed the petitioner to represent against the notice within 15 days. The respondent was ordered to consider the representation within two weeks and issue a Show Cause Notice if credit was wrongly availed, under Sections 73 or 74 of the Act. The writ petition was disposed of with no costs, and connected petitions were closed.