TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 919
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....in existence and duly registered with the GST department as well as Drug License Holder. He further submits that the transaction of purchases made by the petitioner from the Maharashtra Party for the tax period April, 2021 which was against the Tax Invoice dated 30.4.2021 and E-way bill and transport bilty of M/s Vinay Road Lines Pvt. Ltd. He further submits that the whole payments of purchases were made through banking channel and the supplier also submitted his GSTR-1 and GSTR-3B within the time on GST Portal after making due tax on the turnover made by the supplier. 4. Learned senior counsel for the petitioner further submits that the respondent no.2 issued show cause notice under section 74 of the UPGST Act on the ground that the petitioner has claimed ITC through GSTR-3B for the tax period April, 2021 on the purchase made from M/s Unimax Pharma Chem which has itself got its registration cancelled as such the petitioner has incorrectly claim ITC. He further submits that the petitioner submitted a detailed reply to the show cause notice which has been rejected by the respondent no. 2 on the ground that the recipient purchaser can claim the ITC only when the supplier has depos....
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....de payment of tax and in absence thereof proceedings under section 74 of the Act cannot be initiated. In support of his arguments he has relied upon a judgment of this Court in Writ Tax No. 743 of 2023 M/s Khurja Scrap Trading Company vs. Additional Commissioner Grade 2 (Appeal) and another (2025: AHC 151783). 8. Per contra, learned ACSC supports the impugned order. He further submits that supplying dealer of the petitioner M/s Unimax Pharma Chem has shown purchases from the firm whose registration has been cancelled much before, therefore, once supplying dealer purchase is doubted and it could not be proved on record, the benefit of ITC cannot be accorded to the petitioner. Hence the proceeding has rightly been initiated against the petitioner. 9. After hearing the learned counsel for the parties the Court has perused the record. 10. Record shows that notice under section 74 of the Act was issued to the petitioner on the basis of some information being received from the office of Pr. Chief Commissioner, Central Intelligence Unit, Central Excise & Central Tax Vadodara Zone that M/s Unimax Pharma Chem from whom purchases have been made by the petitioner has wrongly been sho....
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....ws that the report used against the petitioner has neither been provided to the petitioner nor material used against the petitioner was ever provided which ought to be provided to the petitioner. 15. GST regime has been brought by the Central Government for ease of business in the country but the revenue officers are bend upon to act against the very theme/ intend of it. When it was noticed by the Government that under the garb of Section 74 of the Act various dealers are being harassed, issued a circular dated 13.12.2023 where it has specifically been stated that proceedings under section 74 of the Act can be initiated if there is a fraud or willful mis-statement or suppression of fact to evade payment of tax and not otherwise. 16. This Court had an occasion to consider such facts which is identical to the facts of the present case in M/s Khurja Scrap Trading Company (supra). Relevant paragraph nos. 11,12 and 13 of the said judgment is quoted below: "11. Further, paragraph nos. 3.2 & 3.3 of the circular dated 13.12.2023 read as under:- "3.2 In this regard, section 74 (1) of CGST Act reads as follows: (1) Where it appears to the proper officer that any tax h....
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....the UPGST Act. The Apex Court in the case of Continental Foundation Joint Venture Holding, Nathpa, H.P. vs. Commissioner of Central Excise, Chandigarh-I [(2007) 10 SCC 337] had an occasion to consider the expression 'suppression', 'wilful misstatement' and has held as under: 11. We are not really concerned with the other issues as according to us on the challenge to the extended period of limitation ground alone the appellants are bound to succeed. Section 11A of the Act postulates suppression and, therefore, involves in essence mens rea. 12. The expression 'suppression" has been used in the proviso to Section 11A of the Act accompanied by very strong words as 'fraud' or "collusion" and, therefore, has to be construed strictly. Mere omission to give correct information is not suppression of facts unless it was deliberate to stop the payment of duty. Suppression means failure to disclose full information with the intent to evade payment of duty. When the facts are known to both the parties, omission by one party to do what he might have done would not render it suppression. When the Revenue invokes the extended period of limitation under....