TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 845
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....: Para No. of The Impugned Order Penalty Under Section Penalty Amount (INR) 10.1 (i) 122(1)(ii) 41,38,811/- (ii) 122(1)(vii) 41,39,138/- 10.2 (i) 122(1)(ii) 16,09,944/- (ii) 122(1)(vii) 64,46,762/- (iii) 122(1)(xvii) And 122(3)(d) 25,000/- 10.3 (i) 122(1)(ii) 1,45,35,988/- (ii) 122(1)(vii) 1,61,14,344/- (iii) 122(1)(xvii) And 122(3)(d) 25,000/- 10.4 (i) 122(1)(vii) 60,62,822/- 10.5 (i) 122(1)(ii) 5,02,19,039/- (II) 122(1)(vii) 5,02,15,522/- 10.6 122(1)(ii) 2,01,74,842/- (ii) 122(1)(vii) 4,75,23,398/- 10.7 (i) 122(1)(ii) 88,38,291/- (ii) 122(1)(vii) 88,23,784/- 10.8 (i) 122(1)(ii) 88,18,288/- (ii) 122(1)(vii) 1,43,03,922/- 10.9 122(1)(ii) 4,99,74,434/- 10.10 (i) 122(1)(ii) 4,03,68,511/- (ii) 122(1)(vii) 3,41,60,120/- 10.11 122(1)(ii) 4,70,27,996/- (ii) 122(1)(vii) 4,7....
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....rms and co-noticees running into 132 in number. 8. The said Order-in-Original dated 31st January, 2025 was challenged by the Petitioner before this Court by way of a writ petition being W.P.(C) 1958/2025 titled Devender Singh v. Additional Commissioner, Central Goods and Service Tax, Delhi West Commissionerate. In the said writ petition, the allegation raised was that no notice of hearing was served upon Mr. Devender Singh i.e., the Petitioner herein and Mr. Pawandeep Sachdeva, who is the son of Petitioner. The said writ petition was disposed of in the following terms: "2. It is in the aforesaid context that we had requested Mr. Singla, learned counsel representing the respondent, to obtain instructions. Mr. Singla today apprises the Court that no e-mail communications were sent and that the Speed Post notices do not appear to have been served upon the writ petitioners within time. In view of the above and on instructions, it was contended that the ends of justice may warrant the matter being remitted for consideration afresh. 3. Accordingly, we allow the present writ petitions and quash the Orders-in-Original dated 31 January 2025. The Respondents may, as a co....
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....d. SSC for the Respondent submits that in the first round of litigation when the SCN was issued, the Petitioner did not raise any allegations in respect of cross examination. In fact, all the statements which were recorded by the CGST Department, were mentioned clearly in the first Order-in-Original dated 31st January, 2025. According to the ld. SSC, the SCN and the first Order-in-Original captured all the statements. 13. The first writ petition i.e., W.P.(C) 1958/2025 which was filed by the Petitioner was disposed of with the direction that the Petitioner would only be given a hearing and no further directions were given. Thus, it is the submission of the ld. SSC that in this round, the Petitioner cannot raise fresh grounds against the SCN itself. 14. The Court has heard ld. Counsel for the parties. 15. The allegations which have been placed on record against the Petitioner in terms of the impugned order are recorded as under: "9.1 The discussion and findings are restricted to only in compliance of Hon'ble Delhi High Court order dated 05.03.2025 passed in the matter of Sh. Pawandeep Sachdeva and Sh. Devender Singh who filed the Writ Petition No. W.P.(C) 1957/....
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.... be linked directly or indirectly through common mobile numbers, email IDs, IP addresses, and overlapping directors or proprietors. Multiple firms were registered from the same IP address or from devices traced to the same geolocation primarily Azadpur and Civil Lines premises. Bank accounts were found opened in the name of fake firms using forged documents and were used only for credit and immediate withdrawal, indicating circular transactions. M/s Heritage International (GSTN: 07AHWPG8867AIZW), found non-existent at the declared address and was involved in bogus export and refund claims. Some of the supplier firms linked to the fake firms were also found nontraceable or deregistered, thus breaking the supply chain and confirming fraudulent ITC availment. Statements of several individuals whose documents were misused confirmed that they were unaware of the GST registrations obtained in their names. 9.2.3 Statements of Sh. Tinku Yadav, Sh. Govind Sharma, Sh. Varun Gupta and Sh. Satish Jain confirmed that they all along with Shri Yogesh Mittal, Shri Saurabh Mittal, Shri Satish Yadav, Sh. Pawandeep Sachdeva and Sh. Devender Singh were involved in creating & operating fraudul....
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..... Shri Devender Singh would personally provide him with necessary documentation, including export invoices, packing lists, and other related papers required for customs clearance. Further, 3 phones resumed from the residence of Shri Devender Singh were forensically analysed which resulted in recovery of some documents related to export firms mentioned by Shri Rakesh Dogra and Shri Rinku Sharma. Further, statements of some of the transporters whose bilties were found during the searches confirmed that Sh. Devender Singh and Sh. Pawandeep Sachdeva used to contact them for the issuance of fake bilties for the transportation of the goods which were actually never supplied. 9.2.6 I find that Shri Devender Singh, who claimed to have run business of his partnership firm M/s Kanishk Esports, Ghaziabad, was also associated with Sh. Tinku Yadav and Sh Govind Sharma, as confirmed by Shri Tinku Yadav vide his statement dated 30.08 2022 Tinku Yadav not only created fake firm in his name is M/s Krishna International but also created other fake firms for Sh. Devender Singh such as M/s Sai Nath Trading Co. M/s Ja Mata Trading Co.,M/s Anuj Corporation,M/s Surender Enterprises.M/s ....
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....terprises and Mis Manish Trading Co. Therefore, Devender Singh appears to be liable for penal action not only under Section 122(1A), but also under Sections 122(1)(ii) and 122(1)(vii) of the CGST Act, 2017 and SGST Act, 2017 for availment of fraudulent: ITC in such non-existent firms without actually receiving the goods and passing the fraudulent: ITC without actually supply of the concomitant goods from such non-existent firms to their claimed buyers, jointly & severally with above said registered non-existent firms as well as creators of such firms. 9.2.7 As per provision of Section 155 of the CGST Act, 2017, where any person claims that he is eligible for ITC under this Act, the burden of proving such claim shall lie on such person In the instant case, none of the 17 nonexistent/ bogus firms could come forward to prove their eligibility towards ailment of ITC in question during the course of the investigation. Thus, it appeared that all such 17 firms buyer firms were also bogus firms and had never been involved in any actual business transactions and were involved in availment of fraudulent ITC and to pass on fraudulent ITC to their buyers without involving any actual s....
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....re was no reason as to why the Petitioner could not have sought the cross examination at that stage. 18. In any event, when the expression 'taxable person' has to be interpreted, the 'taxable person', so long as it is an identified real person/entity it would be the said person/entity itself. However, in the case of fake, non-existent and fraudulent firms, who do not have any real persons as partners or proprietors or even any incorporation, the 'taxable person' would be the person who has got such firms created and used the same for availment of ITC. If the submissions of the ld. Counsel is accepted, then in the case of fake firms or non-existent firms, there would be no liability cast upon anybody despite fraudulently cheating the Exchequer of crores of rupees as is the position in the present case. 19. The submission that under Section 122 of the CGST Act, it is only the 'taxable person' against whom a penalty can be raised, would not give benefit to the Petitioner who is clearly alleged to be the mastermind of the entire maze of transactions resulting in fraudulent availment of crore of rupees of ITC. 20. From the evidence on record, it is clear that the associates of ....
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.... 11. NEELU FILM ENTERPRISES, DELHI (Now closed) Distribution of films 12 PRAKASH INDUSTRIES, LUCKNOW {Now closed Manufacturing of Plywood 13. PRAN IMPORT PRIVATE LIMITED, DELHI Na business could be started प्रश्न - कृपया बताएं कि क्या उक्त कंपनियों या फर्मों के अतिरिक्त आपके परिवार के सदस्यों के द्वारा कोई अन्य कंपनी या फर्म चलायी जा रही हैं, यदि हाँ तो उन कंपनि&....
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....346;रिवार के सदस्यों के द्वारा कोई अन्य कंपनी या फर्म चलायी जा रही हैं, यदि हां तो उन कंपनियों/फर्मों का विवरण उपलब्ध कराएं. उत्तर - मेरे अलावा मेरे परिवार में मेरा पुत्र पवनदीप सचदेवा और पत्नी जसबीर कौर भी उपर....
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....57;ास्तव में मनीष ट्रेडिंग कंपनी (MTC), अरशद ट्रेड इम्पेक्स (ATI) और हिमानी इंटरप्राइजेज (HE) के सितम्बर, 2021 में किये गए से सम्बंधित एक्सपोर्ट इनवॉइस में दी गयी आइटम डिटेल्स से match करती हैं, और इन शीदस में दिखाए गए गारमेंट्स goods è....
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....2348;ारे में भी बताएं, उत्तर:- आपके द्वारा मुझे दिखाए गए उपरोक्त शीट्स के प्रिंट आउट मेने देखे और उसे देखकर मेने इन शीट्स पर अपने हस्ताक्षर कर दिए हैं. इस सन्दर्भ में मुझे यह कहना है कि P6 और 513 के नाम पर इन शोदुस में दि....
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.... of cross examination was not given to the Petitioner. Moreover, the Petitioner has had adequate opportunities even in the first round of litigation before this Court to seek cross examination. Further, the impugned order has dealt with the issue of cross examination in detail and the Adjudicating Authority has held as under: "8.2 Further, Personal hearing in the matter was held on 21.07.2025 through virtual mode, Sh. Akhil Krishan Maggu and Sh. Vikas Sareen attended the personal hearing on behalf of the notices. They reiterated the written submission dated 09.06.2025 made by them and requested for the cross-examination of few persons in terms of CBIC Circular No. 1053/02/2017-CX dated 10.03.2017 and pertains to pre-GST era. Further, the right to cross-examination during adjudication proceedings under the CGST Act, 2017 is limited compared to the Customs Act, 1962 and Finance Act, 1994. Section 138B of the Customs Act explicitly allows cross-examination in quasi-judicial proceedings, a provision not mirrored in Section 136 of the CGST Act, which only applies to court proceedings. thereby excluding cross-examination in GST adjudication. This omission is significant, and the....
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....ly by this Court in Sushil Aggarwal v. Principal Commissioner Of Customs (2025:DHC:698-DB). The relevant portion of the decision reads as under: "15. Accordingly, this Court is of the opinion that in order to ensure that there is compliance of Section 138(B) of the Act, though the same cannot be claimed as an unfettered right in all cases, in the facts of the present case, both Mr. Sushil Aggarwal and Mr. Aidasani are afforded an opportunity to cross examine Mr. Bhalla." 16. The rationale behind setting aside an order/judgment on the grounds of non-provision of the right to cross-examine is to safeguard the affected party from being prejudiced due to non-providing of cross examination. Therefore, such reasoning presumes/implies the existence of prejudice. In other words, if the alleging party fails to prove any substantial prejudice caused to it due to such non-provision, it shall not have the inherent right to set aside such an order/judgment. This view has been upheld by the Supreme Court in various judgments including M/s. Telestar Travels Pvt. Ltd. v Special Director Of Enforcement 2013(9) SCC 549. The relevant portion of the said judgment reads as under: ....
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....sulted in any prejudice so as to call for reversal of the orders and a de novo enquiry into the matter. The answer to that question would depend upon the facts and circumstances of each case." XXXX 18. A perusal of the above decisions reveals that while cross-examination would be required in certain cases, it need not be given as a matter of right in all cases. The provision of the opportunity to cross-examine depends on the facts and circumstances of each case and is warranted only when the party seeking such an opportunity is able to demonstrate that prejudice would be caused in the absence thereof. 19. The Court is of the considered view that parties cannot, by praying for cross-examination, cannot convert Show cause Notice proceedings into mini-trials. Persons seeking cross-examination ought to give specific reasons why cross-examination is needed in a particular situation and that too of specific witnesses. A blanket request to cross-examine all persons whose statements have been recorded by the Department, many of whom are typically employees, sellers, purchasers, or other persons connected to the entity under investigation, cannot be sustained. If ....
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....lished. There was, in fact, no violation of the principles of natural justice since a notice was served on the person in charge of the conveyance. In this backdrop, it was not appropriate for the High Court to entertain a writ petition. The assessment of facts would have to be carried out by the appellate 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" 26. Thereafter, this Court in W.P.(C) 5737/2025 titled Mukesh Kumar Garg v. Union of India & Ors. dealing with a similar case involving fraudul....
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....ion itself is concerned, it is the settled position that this jurisdiction ought not be exercised by the Court to support the unscrupulous litigants. 17. Moreover, when such transactions are entered into, a factual analysis would be required to be undertaken and the same cannot be decided in writ jurisdiction. The Court, in exercise of its writ jurisdiction, cannot adjudicate upon or ascertain the factual aspects pertaining to what was the role played by the Petitioner, whether the penalty imposed is justified or not, whether the same requires to be reduced proportionately in terms of the invoices raised by the Petitioner under his firm or whether penalty is liable to be imposed under Section 122(1) and Section 122(3) of the CGST Act. 18. The persons, who are involved in such transactions, cannot be allowed to try different remedies before different forums, inasmuch as the same would also result in multiplicity of litigation and could also lead to contradictory findings of different Forums, Tribunals and Courts." 27. This position was also followed in M/s Sheetal and Sons & Ors. v. Union of India &Anr., 2025: DHC: 4057-DB. The relevant portion of the said decis....
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.... 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 conoticees, who is also the son of the Petitioner i.e. Mr. Anuj Garg, has already appealed before the Appellate Authori....