CGST Circular on Input Tax Credit Verification Upheld as Valid, Petition Dismissed for Lack of Substantive Grounds

HC dismissed writ petition challenging a CGST circular regarding Input Tax Credit verification. The petitioner contested a circular about fake invoices and inadmissible tax credits issued by Joint Commissioner. Court found the petitioner was not an aggrieved party, as adjudication proceedings were based on legitimate authority findings. Petition was deemed speculative and lacking merit.

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Issues Involved:
Challenge to circular dated 04.10.2023 issued by Joint Commissioner (Anti Evasion), CGST Gautam Budh Nagar.

Judgment Details:

Challenge to Circular:
The petitioner challenged the circular dated 04.10.2023 issued by the Joint Commissioner (Anti Evasion), CGST Gautam Budh Nagar. The circular pertained to passing of Input Tax Credit on the strength of fake invoices without supply of goods by M/s KPS Iron and Alloys Pvt. Ltd. The circular highlighted the visit for inspection u/s 67 (1) of the CGST Act, 2017 to verify the genuineness of the registration of M/s KPS Iron and Alloys Pvt. Ltd. It was observed that the firm had availed and passed on inadmissible ITC. The circular alerted concerned parties to check the genuineness of supplies made by the suppliers and take necessary action to safeguard Government revenue.

Grievance of the Petitioner:
The petitioner's grievance was based on the contents of the circular, stating that numerous adjudication proceedings had been initiated against registered persons who had purchased goods from the petitioner, with the petitioner also being made a party in those proceedings. However, the petitioner did not challenge those proceedings in the writ petition, and it was mentioned that the petitioner had already surrendered their registration with effect from 31.03.2019.

Court's Decision:
The Court found that the petitioner was not a person aggrieved as adjudication proceedings had been initiated based on violations noted by competent authorities. The Court stated that the facts of those proceedings could not be considered at that stage as it would be speculative. Consequently, the Court held that the writ petition lacked merit and was dismissed.

This summary provides a detailed overview of the issues involved in the legal judgment, along with the specific details and decisions made by the Court for each issue.

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