Aghast by the fraudulent availment of the Input Tax Credit (ITC) by firms that are not in existence and the utilization of inadmissible ITC, the Delhi High Court comes down heavily on the manufacturer (Petitioner) and dismissed its petition with a cost of Rs. 50,000 payable to the Delhi High Court Bar Association. The Court refused the argument of the Petitioner that its failure to come clean was attributable to the order passed by the GST Department belatedly.
The Court found that the failure of the Petitioner to file a reply to the show cause notices issued by the GST Department alleging fraudulent availment of ITC was premised on an unacceptable argument that the Petitioner was not a frequent visitor to the GST Portal. When the perusal of the order itself shows that the same was signed by the Additional Commissioner, CGST, on February 01, 2025, and the DRC-07 has been uploaded on February 09, 2025, the Court clarified that the impugned order cannot be said to have been passed outside the period of limitation.
The Division Bench comprising Justice Pratibha M. Singh and Justice Renu Bhatnagar noted that the Petitioner was well aware of the complete investigation that was going on against him, and the callous conduct on behalf of the Petitioner in not giving an appearance cannot be condoned by the Court where the Petitioner chooses not to even participate in the proceedings in any manner whatsoever.
Briefly, two individuals, namely Rajesh Jindal and Adesh Jain, claiming to be engaged in the issuance of invoices without actual supply of goods, had allegedly created, controlled, and managed many fake firms and entities, which were not found to be genuine. The scrutiny had revealed that these firms had passed on inadmissible ITC to various firms, and the searches that resulted in the seizure of documents and digital devices by the CGST Department revealed that the firms were allegedly dummy and had fraudulently availed ITC to the tune of Rs. 50.33 crores.
Appearances:
Advocates Rakesh Kumar and Parveen Kumar Gambhir, for the Petitioner
Advocate Sumit K. Batra, for the Respondent
