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TMI Blog2024 (5) TMI 976X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 16.07.2021, has been dismissed. 3. Briefly stated, the facts of the case are that the petitioner is engaged in manufacturing and sale of Aluminum Casting & Machinery Parts. The petitioner had filed GSTR 3B for the month of May, 2019, August, 2019 and December, 2019. The Deputy Commissioner, Special Investigation Branch, Commercial Tax, Lucknow had conducted a survey of the place of business on 25.02.2020. During survey it was found that the petitioner claimed to have received inward supplies worth Rs. 16,39,200/-from M/s Ridhi Sidhi Enterprises (GSTIN- 09FDTPD8965GIZQ), worth Rs. 17,25,160/- from M/s Siddhartha Trading Company (GSTIN-09HUCPK4270HIZF) and worth Rs. 29,78,025/- from M/s Satvik Enterprises (GSTIN-09GSRPK8763FIZV) and claimed Rs. 2,95,056/-, Rs. 2,63,160/- and Rs. 4,54,275/- respectively towards I.T.C. Claim for inward supplies received from the aforesaid firms. When the survey of the aforesaid three firms was conducted by the Special Investigation Branch, Agra, it came to the light that all the aforesaid three firms were non-existent and bogus firms. Besides the place of business declared by the aforesaid three firms, no other godown or Branch was found to be in e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idence for transport of goods from Agra to Raebareli. The adjudicating authority found that GR No. 213/dated 13.05.2019 and 1363/dated 15.12.2019 had been issued on a similar format, whereas GR No. 694/dated 21.08.2019 and 696/dated 21.08.2019 had been issued on a different format, whereas all of those have been issued by the same transport company and it had no other branch. The GSTIN-09AJBPG5336KIZ5 and phone number 6395078684 was mentioned at the transport builty. GST is payable on transport services. When an enquiry was conducted on the basis of GSTIN number mentioned on the transport Bilty, the GSTIN was found to be not valid as per the information available on the common portal. The phone number mentioned on the transport Bilty, was found to be in use of some lady at Kasganj. From the aforesaid facts, it appears that the Bilties had been attached with the explanation of the petitioner to somehow show the real inward supply by making adjustments. The adjudicating authority found that the alleged supplier firms were non-existence and the Bilties had been produced merely to establish transactions with non-existing firms. No goods were transported from Agra to Raebareli and the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , either in cash or through utilisation of input tax credit admissible in respect of the said supply; and (d) he has furnished the return under section 39: Provided that where the goods against an invoice are received in lots or instalments, the registered person shall be entitled to take credit upon receipt of the last lot or instalment: Provided further that where a recipient fails to pay to the supplier of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, the amount towards the value of supply along with tax payable thereon within a period of one hundred and eighty days from the date of issue of invoice by the supplier, an amount equal to the input tax credit availed by the recipient shall be added to his output tax liability, along with interest thereon, in such manner as may be prescribed: Provided also that the recipient shall be entitled to avail of the credit of input tax on payment made by him of the amount towards the value of supply of goods or services or both along with tax payable thereon." 11. Rule 36 of GST Rules, 2007 provides as follows: "Rule 36. Documentary requirements and conditions for claiming inpu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period February, March, April, May, June, July and August, 2020 and the return in FORM G.S.T.R.-3B for the tax period September, 2020 shall be furnished with the cumulative adjustment of input tax credit for the said months in accordance with the condition above:] [Provided further that such condition shall apply cumulatively for the period April, May and June, 2021 and the return in Form G.S.T.R.-3B for the tax period June 2021 or quarter ending June, 2021, as the case may be, shall be furnished with the cumulatively adjustment of input tax credit for the said months in accordance with the condition above:]" 12. The learned counsel for the petitioner has submitted that for availing inputs tax credit, the petitioner was merely required to be in possession of a tax invoice or debit note issued by the supplier, receipt of goods and actual payment of tax to the Government. As per learned counsel for the petitioner, all the aforesaid three requirement of Section 16 of the GST Act, 2017 had been fulfilled by the petitioner. The documents, required to be submitted for claiming I.T.C. benefit, as mentioned in Rule 36 of GST Rules 2017, had been furnished by the petitioner. 13. Learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complied the conditions as stipulated in Section 9 and therefore, cannot be denied ITC because only selling dealer had failed to fulfil the conditions thereunder. More importantly, the Court finds that there is no provision in the MVAT Act similar to Section 40A of the DVAT Act. Section 40A of the DVAT Act takes care of a situation where the selling dealer and the purchasing dealer act in collusion with a view to defrauding the Revenue. In fact, the operative directions in Mahalaxmi Cotton Ginning Pressing and Oil Industries (supra) indicate that such a measure was suggested by the State Government itself to go after defaulters, i.e. selling dealers failing to actually pay the tax. The Department there undertook to upload on its website the details of the defaulting dealers. It was further undertaken that once there was a final recovery of the tax from the selling dealer, refund would be granted to the purchasing dealer." 15. Per contra, learned Additional Chief Standing Counsel has opposed the writ petition and he has submitted that it is not a case where the I.T.C. benefit has been declined to the petitioner and subsequently the liabilities have been imposed on him merely becau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supplies have been received from non-existent firm to take advantage of I.T.C., which amounts to committing fraud against the department and the public exchequer. 21. It is settled law that fraud vitiates even the most solemn proceedings and the mere fact that the I.T.C. benefit had earlier been granted to the petitioner merely because the firms were registered, would not create any estoppel against the authority taking appropriate action for claiming refund of the benefit wrongly availed by the petitioner on the ground of receiving inward supplies from non-existent firms. 22. The contention that no supplies had been received from the non-existent firms also finds support from the fact that the goods receipts issued by M/s Goyal Goods Carry Corporation, were on different formats. The GSTIN mentioned in the transport Bilties was found to be not valid. The phone number mentioned in the Bilties, was also not of any transport company and it was being used by some lady at Kasganj. 23. The aforesaid findings recorded by the Special Investigation Branch give rise to sufficient material to support the order passed by the adjudicating authority against the petitioner for recovery of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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