TaxTMI 
TaxTMI 
2025 (8) TMI 154
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....s been raised invoking power under Section 74 of the Odisha Goods and Services Tax Act, 2017/the Central Goods and Services Tax Act, 2017 (collectively be called "the GST Act"), the Petitioner has approached this Court way of filing this writ petition under Articles 226 & 227 of the Constitution of India with the following prayer(s): "Under the aforesaid circumstances it is prayed therefore that this Hon"ble Court may be graciously pleased to:- a. Admit the Writ Petition; b. Issue Rule nisi calling upon the impugned order dated 25.02.2025 issued by the Opp. Party No.2 vide Annexure-5 shall not be quashed being illegal, arbitrary, unsustainable in law, contrary to scheme & intent of the Act and Rules; c. Issue Rule nisi calling upon the Opp. Parties as to why initiation of proceeding u/s. 74 shall not be quashed being contrary to the provisions of the Act and Rules, illegal, arbitrary and not in accordance with law; d. Issue Rule nisi calling upon the Opp. Parties as to why the impugned order dated 25.02.2025 issued by the Opp. Party No.2 vide Annexure-5 disallowing the claim of ITC on account of non filing of GST 3B by the suppliers, sha....
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.... contended that the ITC availed by the petitioner was on account of tax paid to the supplier and the same was reflected in self-assessment returns in Form GSTR-2A. Such availment could not have been disallowed on technical approach. He urged that merely because the supplier did not file its returns in GSTR-3B for the months of August, 2019, September, 2019, October, 2019 and November, 2019, the petitioner could not have been saddled with the liability of the supplier by disallowing equal amount of ITC claimed in its returns. Such a manner adopted by the assessing authority would tantamount to directing the recipient to discharge the liability of supplier, who was in default. Such a course, he would submit, is double taxation, which is prohibited under law. 5. Strongly opposing such submission, Mr. Sunil Mishra, learned Standing Counsel appearing for CT & GST Department-opposite party nos.1 & 2 contended that there is no flaw in the reasoned order passed by the assessing officer inasmuch as no legal infirmity was shown by the petitioner. The assessing officer having acted in consonance with the provisions contained in Section 16(2) exercised power under Section 74 after affording....
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....ing Counsel appearing for opposite party no.3. 7. It is manifest from perusal of order dated 25.02.2025 under Section 74 of the GST Act that on account of non- discharge of tax liability by the supplier for the supplies made to the petitioner-recipient during the months of August, September, October and November of 2019 by furnishing returns in GSTR-3B, the Assessing Authority has examined the documents produced before him and disallowed the claim of ITC and raised the impugned demand. 7.1. Perusal of record, it transpires that while the impugned order was passed on 25.02.2025, the writ petition has been filed on 13.06.2025. It is noteworthy to have regard to the provisions of sub-section (1) and sub-section (4) of Section 107 of the GST Act, which stand as follows: "(1) Any person aggrieved by any decision or order passed under this Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act by an adjudicating authority may appeal to such Appellate Authority as may be prescribed within three months from the date on which the said decision or order is communicated to such person. *** (4) The Appellate Authority may,....
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.... 74 and/or to be adduced before him. 8.1. In a case viz. Transtech Solution Vrs. The Commissioner of CT & GST and others, W.P.(C) No.13821 of 2025, disposed of on 24.07.2025, this Court on being apprised of the fact with respect to the transactions being examined with reference to returns as well as evidence of actual movements of goods from one State to the other, desisted from making any observation on factual merit of the matter and left the same for adjudication by the authorities vested with such power to reappreciate evidence under the statute and accordingly declined to entertain the writ petition, even though the petitioner demonstrated that the registration certificates of the alleged non-existent suppliers were valid at the time of transactions. 8.2. In the instant case since the supplier is alleged not to have discharged its tax liability by furnishing returns with respect to transactions effected with the petitioner during August, September, October and November of 2019, the Assessing Authority having perused the books of accounts vis-à-vis documents furnished before him raised the demand on appreciation of evidence. Thus, to question the legality and propr....
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....ate authority. As a matter of fact, the High Court has while doing this exercise proceeded on the basis of surmises. However, since we are inclined to relegate the respondent to the pursuit of the alternate statutory remedy under Section 107, this Court makes no observation on the merits of the case of the respondent. 13. For the above reasons, we allow the appeal and set aside the impugned order of the High Court. The writ petition filed by the respondent shall stand dismissed. However, this shall not preclude the respondent from taking recourse to appropriate remedies which are available in terms of Section 107 of the CGST Act to pursue the grievance in regard to the action which has been adopted by the state in the present case." 11. The above legal position has also been reiterated in Elesh Aggarwal Vrs. Union of India, (Neutral Citation: 2023:AHC:121765-DB) wherein the Allahabad High Court has held that no ground is made for interference on merits in exercise of extraordinary jurisdiction. 12. The nature of the allegation against the Petitioner in the present case, as is clear from the SCN as also the impugned order is that the Petitioner, in collusi....
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....ness. 13. It is observed by this Court in a large number of writ petitions that this facility under Section 16 of the CGST Act has been misused by various individuals, firms, entities and companies to avail of ITC even when the output tax is not deposited or when the entities or individuals who had to deposit the output tax are themselves found to be not existent. Such misuse, if permitted to continue, would create an enormous dent in the GST regime itself. 14. As is seen in the present case, the Petitioner and his other family members are alleged to have incorporated or floated various firms and businesses only for the purposes of availing ITC without there being any supply of goods or services. The impugned order in question dated 30th January, 2025, which is under challenge, is a detailed order which consists of various facts as per the Department, which resulted in the imposition of demands and penalties. The demands and penalties have been imposed on a large number of firms and individuals, who were connected in the entire maze and not just the Petitioner. 15. The impugned order is an appealable order under Section 107 of the CGST Act. One of the co-....