TaxTMI 
TaxTMI 
2025 (7) TMI 626
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....122(1A) of the CGST Act, 2017 read with concurrent provisions of SGST Act, 2017 and further read with Section 20 of the IGST Act, 2017 and Order to recover the same from him; v. I also impose a penalty of Rs. 75000/- upon Shri Bhupinder Kumar, under Section 122(3) (a), (d) & (e) of the CGST Act, 2017 read with concurrent provisions of SGST Act, 2017 and further read with Section 20 of the IGST Act, 2017 and, Order to recover the same from him; vi. I also impose a penalty of Rs.75000/- upon Shri Bhupinder Kumar, under Section 125 of the CGST Act, 2017 read with concurrent provisions of SGST Act, 2017 and further read with Section 20 of the IGST Act, 2017 and, Order to recover the same from him; 4. The brief background of the case is that the Petitioner is a GST consultant against whom a show cause notice was issued on 8th March, 2024 (hereinafter, 'the SCN') by the Directorate General of Goods and Service Tax Intelligence, Ghaziabad Regional Unit (hereinafter, 'DGGI') along with three other individuals namely Sh. Naveen Monga, Sh. Anoop Kumar and Sh. Sanjay Sehgal. 5. The allegations in the SCN were that 44 fake firms were created and operated by Sh. Sanjay S....
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....ons. Ld. counsel for the Petitioner further submits that Section 122(1A) of the CGST Act could not have been invoked for any transactions prior to the said provision being enacted i.e. it cannot be made retrospectively applicable. 11. On the other hand, Ms. Monica Benjamin, ld. counsel for the Department submits that the SCN clearly supports the final findings in as much as in para 19.4.1 of the SCN, the penalty under Section 122 of the CGST Act of the CGST Act has been comtemplated and therefore, it cannot be argued that Section 122(1A) of the CGST Act has been incorrectly invoked. She further submits that the Petitioner, having chosen not to file any reply to controvert the position that he had attained any benefit from the alleged transactions, cannot now argue, after having stayed quiet, that the said findings have been arrived at by the Department in an incorrect manner. She further relies upon the decision of Allahabad High Court in WRIT TAX No. 1453 of 2025 titled M/s Shashi Contractors v. State of U.P. & Anr. 12. Heard. A perusal of the SCN reveals the malaise of availment of fraudulent ITC from and passing on of the same to non-existent firms and entities. A perusal ....
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....) of CGST Act read with the SGST Act, 2017, and or under Section 20 of the IGST Act, 2017; for failure to appear before the proper officer of central tax, to give evidences or produce documents in inquiry; for failure to issue invoice in accordance with the provisions of this Act or the rules made thereunder or fails to account for an invoice in his books of account in violation of the provisions of these Acts or the rules made thereunder. 19.4.3 And, Sh. Naveen Monga, Sh. Bhupender Kumar, and Sh. Anoop Kumar, jointly and severally, are hereby required to show cause within 30 days of the receipt of this notice to the Additional/Joint Commissioner (Adjudication- DGGI cases), Central GST Commissionerate Delhi North, Office of the Commissioner, CR Building, IP Estate, New Delhi-110002 as to why:- 19.4.3.1 Penalty should not be imposed upon them in terms of Section 122(3)(a), 122(3)(d) & 122(3)(e) of CGST Act, 2017, read with Delhi GST Act, 2017 read with UP GST Act, 2017 read with Bihar GST Act, 2017 read with Section 20 of the IGST Act, 2017, for furnishing false returns with intent to avail/ pass ineligible ITC of GST; for false information with regard to registrat....
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....of CGST Act, 2017. Gist of these statements is as under:- a) Statement of Sh. Bhupender Kumar (ANNEXURE A6):- Statements of Sh. Bhupender Kumar were recorded on 28.01.2022, 29.01.2022 & 09.02.2022 wherein he inter-alia accepted that:- * That his name is Bhupender and his residential address is H No.- 357, Near Old Shiv Mandir, Ghevra, Delhi-110081. His contact details are 9310115560/8377897450. * That he has done M.B.A from MDU Rohtak in 2008. After that he started a private job as a data entry operator in Delhi VAT Department, Delhi. Later on, during GST regime in 2018, He met with Shri Sanjay Sehgal in VAT office and he started working for him. Sanjay Sehgal used to give him ID proofs such as PAN Card, electricity bills, mobile numbers, email IDs, rent agreements for GST registration of bogus firms and they used to give him Rs 5000/- per GST registration. The bogus firms registered by him were used for fake billings. * That the residential address of Shri Sanjay Sehgal is 73- Radha Krishna Kunj Amrit Nagar, Ghaziabad. Shri Sanjay Sehgal is also an owner of a bar namely Boot Legger, Hauz Khas Village, Delhi. Shri Sanjay Sehgal is also a director....
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....irms along with id and password (ANNEXURE: A7) was found and he put his dated signature in token of having seen the same. In this regard, he stated that all these firms were created by him and his accountant on the PAN numbers which were provided by Sh.Sanjay Sehgal. After that he had provided the ID and password of these firms to Sh.Sanjay Sehgal. Sh.Sanjay Sehgal, operates the said firms for issuing invoices without supply of goods or services. * That, he was shown the notebook which was resumed during searches at his residence which had details of firms, Sh. Bhupender in his statement dated 29.01.2022 admitted that he had seen the said notebook (ANNEXURE: A8) and put his dated signature on first and last page of the said notebook. He stated that these firms were created by him and his accountant namely Sh.Anoop Kumar. After that the user- ID and password were given to Sh.Sanjay Sehgal. Shri Sanjay Sehgal and his associates had taken registration of these firms only for paper transactions. For ready reference a tabulation of the firms mentioned in the above Annexure is reproduced below*- Sr.No. GSTIN Trade Name/Legal Name 1 07AJUPC2985R1Z7 Beta Design ....
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....rintout was taken in his presence from his phone and proceedings were recorded in Panchnama dated 02.02.2022(Annexure: A11) drawn in the office of DGGI, Ghaziabad Office. In the said whatsapp printout documents/ records of some companies/firms i.e. registration Certificate of M/s Amit and Mohit Trading Pvt. Ltd.(GSTIN-07AATCA4013D1ZY), M/ s Gardena Trading Pvt. Ltd. (GSTIN-07AAICG4470B1ZU) E-pan CARD of M/s Consummate IT solutions Pvt. Ltd.(PAN-AAGCGCN4703Q), M/s Bebrown engineering Pvt. Ltd. (e-Pan-AAICG4470B), M/S Dravmore Infrastructure Pvt. Ltd.(e- PANAATCA4013D) Certificate of Incorporation Pursuant to Change of name of M/s Navgrah Trade Venture Pvt. Ltd, were sent by Mr. Sanjay, he inter-alia stated that he has seen the printout of his whatsapp chat with Sanjay and put his dated signature in token of having seen the same. In this regard, he stated that this chats belongs to Mr. Sanjay Sehgal and these companies were operated byMr.Sanjay Sehgal. He facilitates the liaison work in DVAT office as he has worked for around 04 years as DEO in DVAT office. He also admitted that Sh. Sanjay Sehgal wants to reactivate the registration of aforesaid companies as the registration of these....
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....f CGST Act, 2017 5.1 Spot summon was issued to Sh.Sanjay Sehgal after conclusion of search at his residential premise and his statement dated 11.02.2022 was recorded in the office of DGGI, GRU (ANNEXURE: A16). The gist of the statement is as under:- * That his name is Sanjay Sehgal and he is 12th pass and his contact number is 8882452753 and he also uses WhatsApp numbers 9599141282 and +971524835728. * That his PAN number is ASLPS6566L and he resides at 73, Radha Krishna Kunj, Amrit Nagar, Ghaziabad, Uttar Pradesh and his email id is [email protected] and [email protected]. * That main source of his family income is his business and his brothers are in refrigeration business. He is having retrobar named Bootlegger situated at Hauz Khas village, New Delhi. He is director/partner in Studd Hospitality India Pvt. Ltd and he is not associated with any other company/firm. * That he knew Sh. Bhupender Kumar, Sh. Naveen Monga and Sh. Anoop Kumar for last 04 years and he met all of them at Delhi State GST office where they worked. He also accepted that Sh. Bhupender Kumar, Sh. Naveen Monga and Sh. Anoop Kumar created fake firms o....
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....esumed and the statements tendered by Sh. Bhupender Kumar, Sh. Naveen Monga, Sh. Anoop Kumar and Sh, Sanjay Sehgal, it had revealed that Shri Sanjay Sehgal was the mastermind of creation and operation of various fake firms with the active connivance of Sh. Bhupender Kumar, Sh. Naveen Monga and Sh. Anoop Kumar for availment and passing on of Input Tax Credit without concomitant supply of goods. 16. A perusal of the above statements would show that the Petitioner was all along aware that he was supporting Mr. Sanjay Sehgal in creating fake firms. The exact role which hemay have played during this process is a factual analysis which this Court cannot undertake in a writ petition. 17. The Petitioner was thus fully aware and enabled the creation of these fake firms and was aware that ITC was being fraudulently availed of. The Petitioner, being a GST consultant who was also earlier working with the Delhi GST Department has clearly made use of his knowledge and assisted Mr. Sehgal in setting up these fake firms. 18. While the Petitioner claims that he was paid a commission of Rs. 10,000/- to Rs. 15,000/-, which would constitute benefits derived from the incorporation of these fak....
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....arly amended to also implicate such individuals who may be involved in such fraudulent transactions and the said law cannot be set at naught by holding the same to not be retrospectively applicable to transactions which took place prior to the date when the law was enacted. On the day when the SCN was issued, the provision Section 122 (1A) was in place. 25. The manner in which fraudulent ITC has been availed would also show that it was a continuous process and not a one time act of the parties involved. Under such circumstances Section 122(1A) of the CGST Act was clearly applicable. 26. This Court has already taken a view in W.P.(C) 5737/2025 titled Mukesh Kumar Garg vs. Union of India & Ors. that where cases involving fraudulent availment of ITC are concerned, considering the burden on the exchequer and the nature of impact on the GST regime, writ jurisdiction ought not to be exercised in such cases. The relevant portions of the said judgment are set out below: "11. The Court has considered the matter under Article 226 of the Constitution of India, which is an exercise of extraordinary writ jurisdiction. The allegations against the Petitioner in the impugned order a....