2023 (10) TMI 474 - HC - GST

Availment of irregular input tax credit - Not genuine supplier - issuance of bogus tax invoices - specific case of the petitioner is that the petitioner has responded to the notice and it has been found in the Web Portal. HELD THAT - The petitioner appears to have tax invoices and other collateral evidence to substantiate that the supplier namely, Tvl. Sree Mangalmoorthi Starch Industries, 1st Floor, H-19, Periyar Nagar, Erode 638 009 had indeed supplied goods. The registration was valid as on date of supply, the matter would require a detailed consideration by the Authority. The petitioner has paid the disputed tax that has been confirmed vide impugned order dated 10.02.20233 on 02.09.2023. The impugned order is set aside - the case is remitted back to the respondent to pass a fresh orders on merits and in accordance with law , within a period of eight weeks from the date of receipt of copy of this order - Petition allowed by way of remand.

Summary

Issues involved: Challenge to order under Section 74 of TNGST Act, 2017; Blocking of electronic credit ledger under Rule 86-A(1) of TNGST Rules, 2017; Request for re-explanation and rectification under Section 161 of TNGST Act, 2017; Appeal remedy under Section 107 of TNGST Act, 2017.

Challenge to Order under Section 74 of TNGST Act, 2017:
The petitioner contested an order dated 10.02.2023 issued under Section 74 of the TNGST Act, 2017, based on notices received in October and December 2022. The order was related to the blocking of the petitioner's electronic credit ledger due to alleged irregularities by a supplier, Tvl. Sree Mangalmoorthi Starch Industries, in issuing bogus tax invoices. The petitioner responded to the notices and claimed that the said supplier still held a valid registration.

Blocking of Electronic Credit Ledger under Rule 86-A(1) of TNGST Rules, 2017:
The petitioner's electronic credit ledger was blocked under Rule 86-A(1) of the TNGST Rules, 2017, on grounds of the supplier's alleged malpractice. The petitioner later paid the disputed tax, as confirmed in the impugned order dated 02.09.2023.

Request for Re-explanation and Rectification under Section 161 of TNGST Act, 2017:
The petitioner sought an opportunity to re-explain the case and filed an application under Section 161 of the TNGST Act, 2017 for rectification of the order dated 10.02.2023. The respondent argued that the challenge to the order was beyond the statutory appeal period, citing a Supreme Court decision.

Appeal Remedy under Section 107 of TNGST Act, 2017:
The respondent highlighted the petitioner's appellate remedy under Section 107 of the TNGST Act, 2017, suggesting that the writ petition should be dismissed to pursue the remedy before the Appellate forum. The Department claimed not to have received the rectification application dated 08.03.2023.

Judgment:
After considering arguments, the Court found that the petitioner had evidence to support the supply by the disputed supplier. The impugned order was set aside, and the case was remitted back to the respondent for fresh orders within eight weeks. The amount paid by the petitioner would be subject to final appropriation after the denovo proceedings. The writ petition was disposed of without costs, and connected petitions were closed.