TaxTMI 
TaxTMI 
2025 (11) TMI 1206
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....per scrap to the respondent for which the appellant had raised multiple invoices. The issue pertains to non-payment of value of the goods supplied during 2021-2022 FY. According to the appellant, as on 01.04.2021, in its books the appellant had a debit balance of Rs. 3.27,26,178. Till July, 2021, several sales had taken place and the respondent had been making payments too, which were adjusted against the amount due on earlier bills. The last of the payment so made was on 17.07.2021 when the respondent paid Rs. 50.0 lakhs. Critically, between 14.06.2021 and 06.07.2021, the appellant had sold five consignments of goods whose aggregate invoice value was Rs. 3,07,89,249.60/-. The last payment was adjusted against the outstanding as on that date, which left the balance outstanding payable by the respondent at Rs. 2,70,83,131/-. According to the appellant it is entitled to charge interest at 18% p.a. if the invoice-amount is not paid on the date on which it falls due for payment. b) Demanding payment, the appellant sent e-mails dated 26.12.2022, 31.12.2022 and 01.08.2022. And, then he issued the statutory notice dated 25.09.2023 under Sec. 8 IBC, demanding payment of Rs. 2,70,8....
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....ng Rs. 3,76,54,763/-. b) The Corporate Debtor, in its reply dated 04.10.2023, accepted the outstanding amount and did not dispute the supply or the quantum of dues. The CD, however, expressed an apprehension that the Input Tax Credit (ITC) claimed by it "may possibly be denied" due to the alleged investigation against the appellant. The said apprehension is speculative and not supported by any material. No investigation has been initiated by the GST Department against the OC in respect of the transactions underlying the present claim. No show-cause notice or demand has been issued by the GST Department to either the OC or the CD in relation to the invoices in question. c) The Corporate Debtor has violated the provisions of Section 16(2)(c) of the Central Goods and Services Tax Act, 2017, which requires reversal of ITC where the supplier has not paid the tax to the Government. The statutory provision contemplates that credit claimed in respect of supplies where the supplier has not paid tax shall be reversed by the recipient along with interest; re-availment is permitted only when the supplier makes payment. Since the Corporate Debtor has not paid the outstanding a....
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....pondent, justified its demand for a bank guarantee and withholding of payment till the matter attained finality. It has been submitted that the email dated 04.10.2023 cannot be read as an unqualified admission of liability. The acknowledgment was expressly conditioned upon the Appellant's compliance with furnishing a security against the potential tax exposure. The Respondent thus maintains that a genuine commercial dispute existed prior to the demand notice, thereby excluding the application of Section 9. Discussion & Decision 5.1 The bottom line for sustaining a petition under Sec.9 IBC is the existence of a crystallized debt and its default in payment when the debt has fallen due for payment. So far as the present case is concerned, the respondent does not dispute that the appellant has not supplied the goods, nor does it challenge the quantity and quality of the goods supplied nor does it dispute the value of the goods so supplied. At least the respondent has not raised any such dispute at any time either prior to the issuance of statutory demand notice under Sec.8 IBC or even in its reply to Sec.8. 5.2 The core line of defence which the respondent has taken stems from....
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.... raised or to be raised in future by the company to the buyer for the supply of Goods to the Buyer. 7. In case of rejection/denial of Input Tax Credit to the Buyer by the concerned GST Authorities in respect of Goods & Services Tax (GST) charged on the invoices raised by the Company for the goods supplied to the Buyer till date and/or in respect of Goods & Services Tax (GST) charged on the invoices to be raised for future supply of Goods to the Buyer due to nonpayment of GST under the GST Laws or for any reason whatsoever directly or indirectly attributable to Company, I, on behalf of the company, hereby undertake and agree that the company shall indemnify the buyer in full against all consequences, liabilities of any kind whatsoever directly or indirectly arising from such rejection/denial of ITC including the GST amount, interest and penalty as may be imposed by the GST Authorities 8. I, on behalf of the Company. hereby agree and confirm that any breach of the above indemnification or undertakings shall be construed as breach of the terms and conditions for reimbursement of GST and the Buyer shall he at liberty to take such action against the Company including r....