TaxTMI 
TaxTMI 
2025 (12) TMI 1236
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....m GST DRC -01 dated 7.4.2021 to which reply was submitted on 7.5.2021 and on the basis of said reply another notice dated 13.5.2022 along with reminder no. 3 has been issued to which the petitioner has filed detailed reply along with relevant documents on 17.6.2021 but without providing any opportunity of personal hearing, the impugned order dated 31.5.2023 has been passed. He submits that aggrieved to the said order, the petitioner preferred an appeal, which has also been dismissed. 4. Learned counsel for the petitioner submits that the petitioner falls under the Central jurisdiction and not under the State jurisdiction, therefore, the entire proceeding initiated by the Deputy Commissioner, State Tax, Sector 10, NOIDA is wholly without jurisdiction as the petitioner comes under the jurisdiction of CGST Commissioner, Division III, Range XVI. 5. He further submits that there is no recommendation of GST council for issuing notification of cross empowerment, therefore, in the absence of any recommendation of GST council, the entire proceeding initiated under UP GST is without jurisdiction. He submits that till date only one notification for cross empowerment has been issued in r....
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....therefore, small vehicle was used for taking the goods on multiple round. He submits that the said supply was duly declared in the return filed by the petitioner in GSTR -1 and all sales were duly disclosed. 10. He further submits that purchases of goods from Bihari Ji Packing Product Pvt. Ltd. were also covered by tax invoice and e-way bill and onward supply was duly covered with GSTR -1, which is verifiable in GSTR 2 A. He submits that all transactions herein above are being duly disclosed in the books of account and payments have been made through banking channels, as well as all supporting documents have been brought on record but without verifying the same, the impugned orders have been passed. 11. He submits that under the provisions of GST Act, there is no specific provision prescribed that for movement of goods, toll plaza receipts are required to be submitted as a proof of movement of such goods. He submits that in the absence of any specific provision under the GST Act with regard to justification of movement of goods, the toll plaza receipts are not required to be produced, therefore, the authorities were not justified in drawing adverse inference against the petit....
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....stified. 18. In support of his submission, learned ACSC has relied upon the judgement of Supreme Court in the case of The State of Karnataka vs. M/s. Ecom Gill Coffee Trading Private Limited (2023) SCC Online SC 248. 19. After hearing learned counsel for the parties, the Court has perused the records. 20. The record shows that proceedings have been initiated against the petitioner under Section 74 of SGST Act and for initiation of the proceedings under Section 74 of the Act, the authorities are duty bound to show the reason of fraud, willful misstatement, suppression of fact for availment of input tax credit wrongly or excessive claim of input tax credit. In other words, the adjudicating authority must have express the reason in the show cause notice that the assessee has wrongly availed or utilized input tax credit due to some fraud or willful misstatement or suppression of fact. 21. Once the aforesaid basic ingredient in the show cause notice under Section 74 of the Act is missing, the proceeding becomes without jurisdiction as the assessing authority derives jurisdiction to proceed under Section 74 of the Act only when basic ingredients to such proceeding under Secti....
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....pped against the supplier of the petitioner itself, no adverse inference can be drawn against the petitioner on that basis. The allegation made by the revenue that petitioner is engaged in the circular trading is of no aid to and without any material on record. 28. Further the record shows that purchases and sales are being duly reflected in the GST portal supported by tax invoices, e-way bill and bilty and all payments were made through banking channels. The supporting ledgers were also brought on record, which clearly shows that due purchases have been made as well as actual physical movement of the goods has been taken place and no case of circular trading is made out in favour of the petitioner. 29. Further, an inference has been drawn against the petitioner that the petitioner has failed to submit the toll plaza receipts in order to justify the actual physical movement of the goods. The said finding is patently or apparently perverse and is without any basis. The revenue has failed to bring on record any provision or rule under the GST Act as well as Rules, which compel the assessee to file toll plaza receipts in support of actual physical movement of the goods. On the c....
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....ainst the registered dealer. Record further shows 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....
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....f the Central Excise Act, 1944 is having analogous provision to Section 74 of 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....
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....on of fact to evade payment of tax, therefore, the proceedings under section 74 of the Act out not to have been initiated against the petitioner. 21. In view of the above discussions as well as judgment of the Apex Court and this Court, the impugned order dated 20.12.2022 passed by the Additional Commissioner, Grade-2 (Appeal)- II State Tax, Agra, respondent no.1 as well as the order dated 12.1.2022 passed by the Deputy Commissioner, Commercial Tax, Agra, respondent no.2 cannot be sustained and are hereby quashed. 33. Again this Court in the case of M/s Khurja Scrap Trading Company Vs. Additional Commissioner Grade 2 (Appeal) and Another (Neutral Citation No. 2025:AHC:151793) has held as under: 10. It is not in dispute that the transactions between the petitioner and the selling dealer, i.e., M/s Unique Trading Company, were held on 26.11.2021 and 30.11.2021. The registration of the selling dealer was cancelled on 08.04.2022. The record further shows that GSTR - 1/1FF and GSTR 3-B were also filed, which shows the returns and tax filed by the selling dealer. Once these facts have been brought on record, the State authorities ought to have verified the same, but ....