TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 920
X X X X Extracts X X X X
X X X X Extracts X X X X
....sued by the Assistant Commissioner, CGST, Delhi East. 3. Vide the impugned order the Adjudicating Authority has disallowed the Input Tax Credit to the tune of Rs. 1,06,93,571/- and imposed a penalty equivalent to the same amount. 4. The brief facts of the case are that the impugned Show Cause Notice was issued by the Directorate General of GST Intelligence, Jaipur Zonal Unit, on the basis of investigation conducted against M/s. Akshat International, New Delhi in respect of fraudulent availment and passing of Input Tax Credit to various entities. During the course of investigation, it was found that there are 32 fake entities floated by one Mr. Abhishek Gupta who is a chartered accountant, which were being used in the said fraudulent a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Insofar as the issue of consolidated notice for various financial years is concerned, a perusal of Section 74 of the CGST Act would itself show that at least insofar as fraudulently availed or utilized ITC is concerned, the language used in Section 74(3) of the CGST Act and Section 74(4) of the CGST Act is "for any period" and "for such periods" respectively. This contemplates that a notice can be issued for a period which could be more than one financial year. Similar is the language even in Section 73 of the CGST Act. The relevant provisions read as under: "73. Determination of tax [, pertaining to the period up to Financial Year 2023-24,] not paid or short paid or erroneously refunded or input tax credit wrongly availed or util....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n (1) of section 73, subject to the condition that the grounds relied upon in the said statement, except the ground of fraud, or any wilful-misstatement or suppression of facts to evade tax, for periods other than those covered under sub-section (1) are the same as are mentioned in the earlier notice." 44. Some of the other provisions of the CGST Act, which are relevant, include Section 2(106) of the CGST Act, which defines "tax period" as under: "2.[...] (106) "tax period" means the period for which the return is required to be furnished" 45. Thus, Sections 74(3), 74(4), 73(3) and 73(4) of the CGST Act use the term "for any period" and "for such periods". This would be in contrast with the language used in Sectio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r utilization of ITC in one financial year may actually not be capable of by itself establishing the pattern of fraudulent availment or utilization. It is only when the series of transactions are analysed, investigated, and enquired into, and a consistent pattern is established, that the fraudulent availment and utilization of ITC may be revealed. The language in the abovementioned provisions i.e., the word `period' or `periods' as against `financial year' or `assessment year' are therefore, significant. 48. The ITC mechanism is one of the salient features of the GST regime which was introduced to encourage genuine businesses. In the words of Shri Pranab Mukherjee, the then Hon'ble President of India, who addressed the Nation at th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gus firms involved in suspected Input Tax Credit (ITC) evasion of Rs 44,015 crore were detected in a sustained drive against non-existent tax payers by GST formations across the country since May 2023. An amount of Rs. 44,015 Crore (Rs.15240 Crore (State) + Rs. 28775 Crore (Centre)) of fake ITC has been detected." xxx 54. The present case appears to be one such case where a substantial amount of ITC is alleged to have been availed/utilized running into more than Rs. 83 Crores. The Petitioner is alleged to be one of the main entities/persons involved in the said activity. The transactions are between the years 2017 to 2021. A consolidated notice is, therefore, not merely permissible but, in fact, required in such cases in o....