2025 (5) TMI 227

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....order arises out of a show cause notice bearing no. 03/2023-24 dated 21st April, 2023 (hereinafter, 'SCN'). 4. The Petitioners are stated to be the directors of one M/s Planman HR Private Limited (hereinafter, 'company') which was engaged in the business of manpower recruitment. An investigation was conducted against the company wherein it was revealed that CENVAT credit to the tune of Rs. 22,41,07,389/- had been availed by the Petitioners which was inadmissible. 5. The Petitioner-Gurudas Mallik Thakur was at that time arrested for making false entries in the Service Tax Returns on 21st August, 2020 under the Finance Act, 1994. Thereafter, the SCN was issued and in addition, the Goods and Service Tax (hereinafter, 'GST') Returns were also thoroughly enquired into. 6. The case of the Central Goods and Service Tax Department (hereinafter, 'Department') is that the company had not filed proper returns. Under GSTR-1M, returns were only filed till February, 2019 and GSTR-3B was filed only till December, 2018. Further, the returns were then called upon to be filed by the company. Subsequently, the Department found that both the directors took a position that one Mr. Arindam Chau....

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....T Act, 2017 read with Section 122 (1) (vii) of the CGST Act, 2017 and relevant provisions of Delhi GST Act, 2017 and IGST Act, 2017. (iii) I hereby confirm the demand of interest on the amount confirmed in Point (I & ii) above, under the provisions of Section 50 of the CGST Act, 2017 read with relevant provision of Delhi GST Act, 2017 and IGST Act, 2017. (iv) I hereby confirm the demand of Interest amounting to Rs. 17,23,763/- (Rupees seventeen lakh twenty three thousand seven hundred sixty three only) for the period FY 2017-18 (Jul-Mar) to 2018-19 (upto Dec) from M/s Planman HR Private Limited (GSTIN:07AAFCP0981K1Z5) under Section 50 of CGST Act, 2017 read with relevant provisions of Delhi GST Act, 2017 and IGST Act, 2017. (v) I impose a penalty of Rs. 40,61,37,843/- (Rupees Forty Crore Sixty One Lakhs Thirty Seven Thousand Eight Hundred Forty Three Only) in respect of demand mentioned at point (i) on M/s Planman HR Private Limited, (GSTIN No.07AAFC0981K1Z5) under Section 74 (9) of CGST Act, 2017 read with relevant provisions of the DGST Act, 2017 and IGST Act, 2017. (vi) I impose a penalty of Rs. 35,42,492/-(Rupees thirty five lakh forty two th....

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.... of the DGST Act, 2017 and IGST Act, 2017 and CGST Rules, 2017. (x) I impose penalty of Rs. 35,42,492 (Rupees Thirty Five Lakhs Forty Two Thousand Four Hundred Ninety Two only) on Sh. Dinesh Kumar Raghav (Director of M/s Planman HR Pvt. Ltd.) of M/s Planman HR Private Limited, (GSTIN No. 07AAFCP0981K1Z5) under Section 122 (1A)of CGST Act, 2017 read with relevant provisions of the DGST Act, 2017 and IGST Act, 2017 and CGST Rules, 2017. (xi) I impose penalty of Rs. 35,42,492 (Rupees Thirty Five Lakhs Forty Two Thousand Four Hundred Ninety Two only) on Sh. Varun Khanna (CEO of M/s Plan man HR Pvt. Ltd.) of M/s Planman HR Private Limited, (GSTIN No. 07AAFCP0981K1Z5) under Section 122 (1A)of CGST Act, 2017 read with relevant provisions of the DGST Act, 2017 and IGST Act, 2017 and CGST Rules, 2017." 11. Mr. Mahna, ld. Counsel appearing for the two Petitioners, who were the directors of the company, submits that the Petitioners are not taxable persons under Section 122 of the CGST Act or 122 (1A) of the CGST Act and, therefore, no liability can be fastened on the Petitioners. 12. Ld. Counsel for the Petitioners relies upon the decision of the Bombay High Court in W....

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....not be gone into in the present writ petition. 19. Clearly, there is no doubt that the Petitioners were directors of the company. The exact role that the Petitioners played in the said company, the control and management that the Petitioners exercised as also whether they derived any benefit would be a question that would have to be factually ascertained on the basis of the records which would be placed before the Appellate-Authority. The impugned order is clearly an appealable order under Section 107 of the CGST Act. 20. Mr. Mahna, ld. Counsel for the Petitioners submits that the Petitioners not being taxable persons, would face difficulty in appealing the impugned order. 21. Section 107 of the CGST Act starts with the expression 'any person'. Thus, the filing of appeal is permissible by any person and not merely by a taxable person. 22. The statements which have been recorded by the directors i.e., the Petitioners show that each of them is trying to shrug off their responsibility. In the opinion of this Court, the matter requires closer scrutiny on facts by the Appellate Authority as to who was responsible for running the company and who was taking decisions including....

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....der sub-section (1)." 26. Insofar as Section 122 of the CGST Act is concerned Section 122 (1) of the CGST Act relates to a 'taxable person'. However, Section 122 (1A) of the CGST Act clearly relates to 'any person' who retains the benefit of a transaction which is covered under Clauses (i), (ii), (vii) or (ix) of Section 122 (1) of the CGST Act. The relevant provisions are set out below: "122. Penalty for certain offences.--(1) Where a taxable person who-- (i) supplies any goods or services or both without issue of any invoice or issues an incorrect or false invoice with regard to any such supply; (ii) issues any invoice or bill without supply of goods or services or both in violation of the provisions of this Act or the rules made thereunder; XXXX (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; XXXX (ix) takes or distributes input tax credit in contravention of section 20, or the rules made thereunder; XXXX [(1A) Any person who retains the benefit of a....

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.... any managerial control even thereafter or not. 34. The decision in Bharat Parihar (Supra) is clearly applicable in the present case. The relevant extract is set out below: "17. Sub-section (1) of Section 83 empowers the Commissioner for the purpose of protecting the interest of the revenue to provisionally attach any property, including bank account belonging to the taxable person or "any person" specified in Section 122 (1-A) in such manner as may be prescribed. 18. The two persons referred to in Section 83 (1) are (i) taxable person or ii) any person specified in Section 122 (1-A) of the Act.  Therefore, in second limb the phrase "any person" would include non-taxable person. 19. Section 122 (1-A) provides that any person, who retains the benefit of a transaction covered under clauses (i)(ii) (vii) or (ix) of subsection (1) and, at whose instance such transaction is conducted shall be liable to a penalty of a sum equivalent to the tax evaded or input tax credit availed of or passed on. In our view, thus the powers conferred under Section 83(1) of the Act can be exercised in respect of a person, who may not be within the territorial jurisdiction....