2021 (10) TMI 1122 - HC - GST

GST Fraud - Misuse of Aadhar and PAN cards of writ petitioner - offence of issuing invoice without supply of goods in violation of TN-GST, C-GST Acts and rules thereunder - levy of penalty u/s 122(1)(ii) of TNGST and CGST Acts - HELD THAT - This Court is of the view that owing to the nature of the stand taken by the writ petitioner and owing to this Court noticing that a criminal complaint has been lodged by the writ petitioner and investigation is under-way, it would only be appropriate to set aside the impugned order without expressing any view or opinion on the merits of the matter, leaving it open to respondents to proceed afresh either against writ petitioner or any other entity or person depending on the outcome of investigation that is under-way qua alleged misuse of writ petitioner's Aadhar and PAN cards to obtain a fake registration. In the light of writ petitioner having demonstrated her bona fides by lodging an FIR, it is only appropriate that an order as on the lines alluded to supra is made. Impugned order being made by first respondent and consequential order being order dated 23.07.2021 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 - it is made clear that no opinion or view on the merits of the matter has been expressed in this order. Petition disposed off.

Summary

Issues:
1. Challenge to an order under TN-GST and C-GST Acts for issuing invoices without supply of goods.
2. Allegation of 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 pending investigation.
5. Disposal of the writ petition with specific directives.

Analysis:
1. The main issue in this case pertains to the challenge against an order dated 08.02.2021 under the TN-GST and C-GST Acts, alleging the issuance of invoices without the actual supply of goods. The impugned order was based on a surprise inspection that revealed the alleged offense committed by the taxable person. Penalties were levied under Section 122(1)(ii) of both Acts.

2. The petitioner consistently maintained that someone misused their Aadhar and PAN cards to obtain a fake registration in the name of a different entity. This claim was supported by evidence presented in the impugned order, specifically highlighted in paragraph 11. The court acknowledged the criminal complaint lodged by the petitioner and the ongoing investigation into the misuse of personal identification documents.

3. Following submissions from both parties, the court decided to set aside the impugned order without expressing any opinion on the merits of the case. This decision was influenced by the petitioner's cooperation in lodging a police complaint and the registration of an FIR for offenses under the IPC and Information Technology Act. The court emphasized the importance of allowing the investigation to proceed before making any conclusive judgments.

4. As a result of the petitioner's proactive steps in filing complaints and demonstrating good faith, the court deemed it appropriate to dispose of the main writ petition. The orders dated 08.02.2021 and 23.07.2021 were set aside due to the ongoing investigation into the alleged misuse of personal identification documents. The court preserved the rights of the revenue authorities to take further action based on the investigation's outcome.

5. The court issued specific directives for the petitioner to provide updates on the investigation progress to the respondent within three months and subsequently every three months until its completion. The judgment concluded by disposing of the writ petition and related miscellaneous petitions without any costs awarded, emphasizing the importance of maintaining the status quo during the investigation process.