9911796707
TMI Blog2025 (4) TMI 676X X X X Extracts X X X X X X X X Extracts X X X X ..... "CST Act") and Gujarat Goods and Services Tax Act, 2017 (For short "GST Act") to raise a demand under section 74 against M/s. Poonam Creation whose proprietor was one Ashok Gaggar on the ground that M/s. Poonam Creation had availed fraudulent Input Tax Credit on the strength of alleged fake invoices. The Proper Officer proposed to impose a joint and several liability/penalty to the tune of Rs.4,34,16,381/- on the petitioners along with other co-noticees under sections 74 and 122 of the CST Act and GST Act. 4. In pursuance to such show cause notice, the petitioners submitted their reply on 12.12.2024. 5. The Proper Officer vide impugned order-in-original dated 24.12.2024 rejected the contentions raised by the petitioner and raised a demand of Rs.4,34,16,381/- against the petitioners along with other noticees under section 74(1) of the CST Act and GST Act and a penalty was imposed of even amount under section 122 and 127 of the CST Act and GST Act. 6. Being aggrieved by the show cause notice and the impugned order, the petitioners have preferred the present petition. 7. Learned advocate Mr. Sholab Arora for the petitioners submitted that the impugned order-in-original is without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... absence of any material in that regard placed on record, the entire foundation on which the case against the petitioner is build up, is without any basis, as there is no specific allegation but the allegations made against the petitioners are vague, lacks details and/or unintelligible which is sufficient to hold that the petitioner was not given proper opportunity to meet the allegations indicated in show cause notice. It was therefore, submitted that in view of decision of the Hon'ble Apex Court, the impugned order-in-original by which the penalty is levied upon the petitioners is liable to be quashed and set aside. 11. It was further submitted that so far as petitioner no.2 is concerned there is no allegation levelled against him either in the show cause notice or in the orderin- original and as such, no penalty could have been levied upon petitioner no.2 by any stretch of imagination. 12. Further reliance was placed on decision of Hon'ble Bombay High Court in case of Shantanu Sanjay Hundekari v. Union of India and others reported in 2024 SCC OnLine Bom 929 to submit that provisions of section 74 read with section 122 of the CST Act can only be invoked against taxable person a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on whatsoever. The allegations against Sh. Shankar Mundra (Noticee No. 4) and Sh. Ujit Kishnagopal Mundra (Noticee No. 5) appear only in paras 5.2 and 5.3 (page 51 of the SCN) and there are no other factual allegations against the two of them elsewhere in the SCN. 4. It has been alleged in para 5.2 that certain bank deposits were made in the account of M/s Poonam Creation by M/s Ashok Creation before the GST registration of M/s Poonam Creation; and that in the matter of M/s Ashok Creation, a Show Cause Notice was issued by DGGI, SZU, Surat wherein it was found that M/s Ashok Creation was created by Sh. Shankar Mundra (Noticee No. 4) for fraudulent purposes. In response, it is submitted that: first,the copy of the said Show Cause Notice issued by DGGI has not been supplied along with the captioned SCN, nor does the captioned SCN provide any details as to how it was concluded that M/s Ashok Creation was created by Sh. Shankar Mundra (Noticee No. 4), and therefore, this allegation is absolutely vague in nature and deserves outright denial; second, even otherwise, it has not been alleged in the captioned SCN that ITC has been passed from M/s Ashok Creation to M/s Poonam Creation or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioners that the petitioners are part of the syndicate who have availed the benefit of input tax credit to the tune of Rs.4,34,16,381/- during the period of August, 2017 to September, 2020 in contravention of the provisions of the GST Act by creating bogus firm of M/s. Poonam Creation and M/s. Ashok Creation and thereafter adopting the modus operandi as stated in the impugned order-in-original by availing the fake invoices from more than 67 suppliers without supply of the material goods. 18. Thus in our opinion the contentions raised on behalf of the petitioners are required to be rejected outright which are based upon the legal provisions contrary the facts of the case which are emerging from the record as recorded in impugned order-in-original. 19. Reliance placed by learned advocate for the petitioner on decision of Hon'ble Supreme Court in case of Brindavan Beverages (P) Ltd. And others (supra) is concerned, the facts before the Hon'ble Supreme Court were with regard to judgment and order passed by the Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT) wherein appeal was preferred before CEGAT and after scrutiny of the facts and documents, the order was pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground of vague allegations whereas on perusal of the show cause notice and the impugned order-in-original, role of the petitioners is articulated by the respondent authorities which clearly shows in absence of any denial by the petitioners to the effect that the petitioners were part of syndicate and therefore, the impugned order cannot be said to be without jurisdiction. 20. With regard to the contention raised on behalf of the petitioners that notice under sections 74 and 122 of the GST Act could have been issued only against taxable person is concerned, it is pertinent to note that petitioners are only co-noticee along with the taxable person who has helped and who is part of the syndicate so as to evade tax and as such, as per the provisions of section 74 read with section 122 of the GST Act, the respondents were justified in initiating the proceedings against the petitioners who are part of the transactions of taxable person and who have aided the taxable person in defrauding the revenue. The petitioners have also not stated who are the taxable persons and only name of M/s.Poonam Creation is stated and the role of the petitioners with M/s. Poonam Creation or Ashok Creation i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der sub-section (3) of section 52; (vii) takes or utilises input tax credit without actual receipt of goods or services or both either fully or partially, in contravention of the provisions of this Act or the rules made thereunder; (viii) fraudulently obtains refund of tax under this Act; (ix) takes or distributes input tax credit in contravention of section 20, or the rules made thereunder; (x) falsifies or substitutes financial records or produces fake accounts or documents or furnishes any false information or return with an intention to evade payment of tax due under this Act; (xi) is liable to be registered under this Act but fails to obtain registration; (xii) furnishes any false information with regard to registration particulars, either at the time of applying for registration, or subsequently; (xiii) obstructs or prevents any officer in discharge of his duties under this Act; (xiv) transports any taxable goods without the cover of documents as may be specified in this behalf; (xv) suppresses his turnover leading to evasion of tax under this Act; (xvi) fails to keep, maintain or retain books of account and other documents in accordance with the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s or both on which any tax has not been paid or short-paid or erroneously refunded, or where the input tax credit has been wrongly availed or utilised,- (a) for any reason, other than the reason of fraud or any wilful misstatement or suppression of facts to evade tax, shall be liable to a penalty of ten thousand rupees or ten per cent. of the tax due from such person, whichever is higher; (b) for reason of fraud or any wilful misstatement or suppression of facts to evade tax, shall be liable to a penalty equal to ten thousand rupees or the tax due from such person, whichever is higher. (3) Any person who- (a) aids or abets any of the offences specified in clauses (i) to (xxi) of subsection (1); (b) acquires possession of, or in any way concerns himself in transporting, removing, depositing, keeping, concealing, supplying, or purchasing or in any other manner deals with any goods which he knows or has reasons to believe are liable to confiscation under this Act or the rules made thereunder; (c) receives or is in any way concerned with the supply of, or in any other manner deals with any supply of services which he knows or has reasons to believe are in contraventio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioners may raise all the contentions which are raised in these petitions before the adjudicating authority including the issue of jurisdiction as all the questions raised by the petitioners herein are left open to be adjudicated by the adjudicating authority. 90. In case of Siemens Ltd. v. State of Maharashtra and others reported in 2006 (12) SCC 33, while considering the jurisdiction of the High Court in entertaining the writ petition questioning show cause notice Hon'ble Apex Court has held that ordinarily a writ court may not exercise its discretionary jurisdiction in entertaining a writ petition questioning a notice to show cause unless the same appears to be without jurisdiction. In the facts of the present case, the impugned show cause notices are not without jurisdiction as respondent no.2 would have jurisdiction to adjudicate the same as per the analysis of various notifications relied upon on behalf of the petitioners. 91. Similarly, in case of Special Director and another v. Mohd. Ghulam Ghouse and another reported in 2004 (3) SCC 440, the Hon'ble Supreme Court has held as under: "5. This Court in a large number of cases has deprecated the practice of the H ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
