TaxTMI 
TaxTMI 
2026 (3) TMI 1325
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....ate Tribunal consequent to the order passed by Hon'ble Supreme Court dated 14.11.2025 in Writ Petition (Criminal) No.440/2025 in M/s A.S. Met Corp Pvt. Ltd. vs. The Registrar & Ors. The Hon'ble Supreme Court by the order dated 14.11.2025 transferred the Company Appeal (AT)(CH)(Ins.) No.210 of 2023 to be heard by Principal Bench of the National Company Law Appellate Tribunal ("NCLAT") at New Delhi. In Paragraphs 5 and 6 of the order the Hon'ble Supreme Court directed as follows: "5. In the interest of proper adjudication of the pending Company Appeal, we deem it appropriate to direct that Company Appeal (AT) (CH)(Ins) No.210/2023, which is pending before the NCLAT, Chennai Bench, be transferred forthwith, along with all records, to the Principal Bench of the NCLAT at New Delhi. 6. In the peculiar facts and circumstances of the case, we request the Hon'ble Chairperson of the NCLAT to list the said appeal before the bench presided over by His Lordship and decide the same, after issuing notice and giving adequate hearing to the contesting parties, at the earliest. While the petitioner before us has taken a fair stand to extend full cooperation for an early adjudicatio....
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....s engaged in contracting work with respect to rural water supply for more than 25 years. In the year 2017 the CD had acquired a company named M/s. Midfield industries Ltd., which is engaged in the production and supply of Steel Strips. On acquisition of the company, the previous management of the company was retained and one Mr. Allu Nagesh was made Independent Director and was delegated the duty of managing the day-to-day affairs of the Company. (ii) The Operational Creditor ("OC") - M/s A.S. Met Corp Pvt. Ltd. had been supplying the goods C.R.F.H Strips, C.R.F.H. Coils and Steel Strapping Seals etc. since the year 2019. The practice between the OC and the CD was to make payment against goods supplied by issuing Letter of Credit. On issuance of Purchase Order by the CD, the supplier would raise proforma invoice and on being forwarded of the same, the CD would request its Bank to issue Letter of Credit, which will be forwarded to the suppliers. The supplier would either discount the invoices or await payment under the Letter of Credit, payable within 90 days. All the suppliers, including the OC had discounted the Letter of Credit. The CD used to repay the same to the Bank ....
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....orgery shall be taken. (iv) After completion of entire investigation on 30.06.2022, the CD filed an FIR for the offences under Section 406, 409, 420, 468, 471, 467, 381 read with 120B and 109 of Indian Penal Code against the OC and other suppliers which was transferred to Economic Offences Wing, Cyberabad. In the above FIR, certain employees of the CD, who had colluded with the suppliers were also named including one of the Director of the CD Mr. Allu Nagesh was also named in the FIR. Mr. Allu Nagesh and certain other officials of the OC were arrested by the Police. (v) It was after filing of the FIR and arrest of several accused, the OC filed Section 9 Petition on 24.08.2022 being CP(IB) No.263/HDB/2022 with the NCLT Hyderabad. Counter/ reply affidavit was filed by the CD on 25.10.2022. An FIR was also filed by OC against the CD on 07.03.2023, which was registered. The CD filed an application before the Adjudicating Authority for receiving additional documents being IA No.731 and 732 of 2023. Both the applications were allowed on 26.05.2023 by the Adjudicating Authority. Parties filed their written submissions and by the impugned order dated 14.07.2023, Section 9....
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....A. Response to the IA No.1397 of 2026 was also filed by the Appellant on 25.02.2026. Transfer Appeal was heard on 25.02.2026 on which date parties were heard and hearing completed. Learned Counsel for the Respondent No.1 during course of hearing referred to and relied on documents which were annexed along with the IA No.1397 of 2026 as well as documents were also relied by the Appellant as referred to the counter affidavit in IA No.1397 of 2026. Parties having permitted to refer the documents. IA No.1397 of 2026 is also allowed. 10. We have heard Shri Arun Kathpalia, Learned Senior Counsel appearing for the Appellant and Mr. Sanjay Ghose, Learned Senior Counsel appearing for the Respondent No.1. Shri Ashwini Kumar Upadhyay, Learned Counsel has appeared for Applicant in IA No.1600 of 2025. Learned Counsel for the IRP has also appeared. 11. Shri Arun Kathpalia, Learned Senior Counsel appearing for the Appellant submits that the Adjudicating Authority committed error in passing order dated 14.07.2023 admitting Section 9 application filed by the Respondent No.1 whereas immediately on receipt of the demand notice dated 31.05.2022, the Corporate Debtor had issued reply to demand no....
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....was pleaded that amounts were partly paid and balance adjusted against outstanding dues from the Operational Creditor. There were large numbers of duplicate invoices. With respect to Invoice Nos.0196, 0197 & 0198 dated 20.10.2021 and Invoice Nos.0201 and 0202 dated 21.10.2021 were all fabricated. There were no vehicle movement. With respect to Invoice Nos.0227, 0228, 0229 and 0234, materials were rejected which was admitted by e-mail dated 14.02.2022 of the Operational Creditor. It is submitted that the Adjudicating Authority has erroneously observed, that although it was pleaded by Operational Creditor that input credit towards the invoices have been claimed by the Corporate Debtor same was never disputed. Before the GST Authority, the Corporate Debtor, who is disputing the invoices was to exercise its statutory rights of raising a dispute before the authorities, so that the subject invoices would have been decided. The First Information Report which was lodged by the Corporate Debtor on 30.06.2022 was post demand notice dated 31.05.2022. It is submitted that the Adjudicating Authority also erred in relying on Affidavit dated 15.03.2022 given by Allu Nagesh acknowledging the debt,....
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....in March 2022 which was not the fact. Last payment was made on 20.12.2021 in respect of outstanding invoices by discounting the invoices by (OC) supplier against letter of credit. After initiation of audit by Corporate Debtor, no payments have been made to Operational Creditor and view taken to the contrary by the Adjudicating Authority is against the record. The finding of the Adjudicating Authority that the plea of pre-existing dispute as raised in the reply dated 15.06.2022 cannot be accepted since Corporate Debtor made payment in respect of invoices without any demur post December 2021 is wholly incorrect and against the record. The view of the Adjudicating Authority that defence raised by Corporate Debtor is spurious and a moonshine defence is wholly incorrect and against the record. Even if the criminal proceedings is not relied which was initiated by the Corporate Debtor prior to filing Section 9 application, there was ample materials on the record to indicate that dispute has arisen between the parties prior to issuance of demand notice dated 31.05.2022. The factum of conducting audit from 22.12.2021 is a fact, which is not denied and all purchases were stopped from 22.12.2....
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....e in some cases found to be Nano Car and other two wheelers. There were large number of discrepancies in the e-way bill and invoices which was all ignored. The present is a case where Operational Creditor has been accused of criminal offences on basis of FIR lodged by the Corporate Debtor investigation has been completed and charge-sheet has been filed. Some of the employees of the Corporate Debtor as well as Operational Creditor were also arrested. Section 9 application filed by the Operational Creditor was nothing but a measure taken to shield it from criminal prosecution and to create hurdles in running of the Corporate Debtor. Section 9 petition was not maintainable because underlying contract i.e. purchase order were not filed by the Operational Creditor. Learned Counsel for the Appellant further submitted that the GST Department has passed assessment order dated 02.07.2025 making a detailed assessment of Operational Creditor which assessment order has confirmed that E-way bills/ invoices raised by the Operational Creditor were without supply of materials and there was no vehicle movement. The assessment order dated 02.07.2025 which has been taken on record fully proves the de....
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....notice dated 31.05.2020 which cannot be relied as pre-existing dispute between the parties. Adjudicating Authority has rightly come to the conclusion that defence raised by the Corporate Debtor is spurious and a moonshine defence. The Operational Creditor has paid the GST on the invoices which was also pleaded in Section 9 application. In the written submissions filed by the Operational Creditor before the Adjudicating Authority, it was also pleaded that the Corporate Debtor has taken benefit of input tax credit with respect to GST paid by the Operational Creditor which factum was never denied. Learned Counsel for the Respondent has relied on relevant GST Form submitted by Operational Creditor which is brought on record along with IA No.1397 of 2026. It is submitted that relevant tax return filed by the Operational Creditor clearly reflects the input tax credit admissible to the Corporate Debtor which were utilised. Registration of FIR after demand notice cannot be any basis. No copy of so-called internal audit report conducted in December 2021 has been placed on record by the Corporate Debtor. Any FIR lodged after issuance of demand notice cannot rely for any pre- existing dispute....
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....d Counsel has also appeared in support of IA No.1600 of 2025 represented by its Director Mr. Saurabh Agarwal which was filed by one M/s. Bengal Cold Rollers Pvt. Ltd. praying for Applicant to intervene in the Appeal. Shri Upadhyay has also referred to a Writ Petition No.19 of 2026 filed by Mr. Saurabh Agarwal in the Hon'ble Supreme Court. The Applicant has submitted that the management of KSR Infratech Pvt. Ltd. be handed over to the IRP. 14. Learned Counsel for both the parties have placed reliance on judgments of this Tribunal and the Hon'ble Supreme Court which we shall refer to while considering the submissions in detail. 15. The Adjudicating Authority vide order dated 14.07.2023 has admitted Section 9 application. Adjudicating Authority in paragraph X has framed following two questions for consideration:- "1. Whether the documentary evidence furnished with the application shows that the operational debt of a sum over rupees one crore due and payable by the respondent exits? If so, whether the respondent defaulted in payment of the same? 2. Whether there is existence of dispute between the parties or record of pendency of suit or arbitration proceedings ....
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....emand notice. The Corporate Debtor within a period of 10 days of the receipt of the demand notice is obliged to bring the notice of the operational creditor existence of dispute, the payment of unpaid operational debt. Section 9 provides that after the expiry of the period of 10 days from the date of delivery of the notice or invoice demanding the payment if the operational creditor does not receive payment from the corporate Debtor or notice of the dispute under sub- section (2) of Section 8, operational creditor may file an application before the Adjudicating Authority. Section 9(1) is as follows:- "9. Application for initiation of corporate insolvency resolution process by operational creditor. - (1) After the expiry of the period of ten days from the date of delivery of the notice or invoice demanding payment under sub-section (1) of section 8, if the operational creditor does not receive payment from the corporate debtor or notice of the dispute under sub- section (2) of section 8, the operational creditor may file an application before the Adjudicating Authority for initiating a corporate insolvency resolution process." 20. Section 9(1) contemplates for filing an ....
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....preme Court has laid down following:- "51. It is clear, therefore, that once the operational creditor has filed an application, which is otherwise complete, the adjudicating authority must reject the application under Section 9(5)(i)(d) if notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility. It is clear that such notice must bring to the notice of the operational creditor the "existence" of a dispute or the fact that a suit or arbitration proceeding relating to a dispute is pending between the parties. Therefore, all that the adjudicating authority is to see at this stage is whether there is a plausible contention which requires further investigation and that the "dispute" is not a patently feeble legal argument or an assertion of fact unsupported by evidence. It is important to separate the grain from the chaff and to reject a spurious defence which is mere bluster. However, in doing so, the Court does not need to be satisfied that the de- fence is likely to succeed. The Court does not at this stage examine the merits of the dispute except to the extent indicated above. So long as a dispute truly exist....
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....ient to state that it disputes the Award. Such a case would clearly come within para 38 of Mobilox Innovations (supra), being a case of a pre-existing ongoing dispute between the parties. The Code cannot be used in terrorem to extract this sum of money of Rs. two lakhs even though it may not be finally payable as adjudication proceedings in respect thereto are still pending. We repeat that the object of the Code, at least insofar as operational creditors are concerned, is to put the insolvency process against a corporate debtor only in clear cases where a real dispute between the parties as to the debt owed does not exist." 26. The Hon'ble Supreme Court in Civil Appeal No.4583 of 2022- "M/s. S.S. Engineers vs. Hindustan Petroleum Corporation Ltd. & Ors." held that the operational creditor can only trigger the CIRP process when there is undisputed debt and default in payment thereof. It was clearly held that if the debt is disputed application of the operational creditor must be dismissed. In the above case, an application was filed by the operational creditor against Hindustan Petroleum Corporation Ltd. which was admitted by the NCLT, the application was filed by operational cre....
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....failure to repay the dues of an Operational Creditor. However, if the debt is disputed, the application of the Operational Creditor for initiation of CIRP must be dismissed." 29. In subsequent judgment of the Hon'ble Supreme Court in "Sabarmati Gas Ltd. v. Shah Alloys Ltd., (2023) 3 SCC 229", the Hon'ble Supreme Court referring to judgment in "Mobilox Innovations (P) Ltd." (supra) again reiterated following in paragraphs 56 and 57:- "56. In the contextual situation it is only apposite to be remindful of the observation in Mobilox Innovations [Mobilox Innovations (P) Ltd. v. Kirusa Software (P) Ltd., (2018) 1 SCC 353 : (2018) 1 SCC (Civ) 311] that in doing the act of separating the grain from chaff the Court need not to be satisfied that the defence is likely to succeed. It is enough that a dispute exists between the parties and in other words, what is to be seen is whether there was a plausible contention requiring investigation for the purpose of adjudication. Taking note of the nature of the dispute of the respondent as referred hereinbefore in respect of the claim made by the appellant, we do not find any reason to disagree with the concurrent findings of the Tribuna....
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....on to Adjudicating Authority) Rules, 2016) Date: 31 May 2022 To, KLSR Infratech Limited CIN: U45400TG2011PLC072158 H.No: 2-56/D/213/9A & 9B, F No. 4B, KLSR Towers, Ayyappa Society, Madhapur, Hyderabad, Telangana-500081 From, A.S. Met Corp Private Limited CIN: U74900TG2014PTC096666 Flat No 501, Vishal's Srinivasa Krupa Apts, Adj to Manasarovar Heights, Rte Colony, Hasmathpet Hyderabad - 500009 Subject: Notice attached to invoice demanding payment Madam/Sir, M/s. A.S. Met Corp Private Limited, hereby provides notice for repayment of the unpaid amount of Rs. 3,79,06,143/- (Principal - Rs. 2,72,29,416/-, Interest - Rs. 38,69,370/-, Penalty - Rs.68,07,357) (Three Crores Seventy Nine Lakhs Six Thousand One Hundred and Forty Three Rupees Only) that is in default as reflected in the invoices attached to this notice. Copy of Invoices along with demand calculation sheet are enclosed as Annexure-1. In the event you do not repay the debt due to us within ten days of receipt of this notice, we may file an application before the Adjudicating Authority for initiating a Corporate Insolve....
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....d is steel there will be variation in quantity in every consignment. However, payments were made to you for 100% of invoice value without any reduction as per the weight because of which only we got the doubt that fraud has happened. Therefore, it is clearly evident that our employees had colluded with your company and other vendors. -Further, we also got some communication from banks regarding the LCs which were paid, that some of the vehicle numbers mentioned by you are fake and they had insisted for clarification regarding how the material was received without a valid vehicle. Hence, we started investigation on the said activity. -As per our records, there are no invoices which are due to be paid by you earlier to December 2021. -The LCs which were issued by us were utilized by you against your invoices of December 2021. If at all there were pending invoices earlier to said date, you would have claimed for the same before claiming for latest invoices which you have not done. This clearly explains that there were no old pending invoices earlier to said date. As a general practice any vendor would insist for clearing previous invoices before clearing the....
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....o are absconding and non-traceable as they were also involved in this fraud along with the current employees. We are also going to initiate necessary legal action against all the persons involved in this fraud amounting to crores of rupees. Further, we are also going to file petitions with revenue departments also regarding fictitious invoices and also to get vehicle tracking. -We also came to know that the invoices for which we had already made payments are also fictitious invoices. We are investigating into this matter in depth and we will claim the respective amounts from you along with all supporting evidences which will be produced at appropriate time. -As you are aware that the fraud has happened in which you are also involved, your company is approaching us through our official email id [email protected] to which no earlier communication was made. Moreover, there is no official communication either with respect to orders placed or quotations availed. At prima-facie we found that your company along with other companies like Bengal Cold Rollers Pvt Ltd. VVR Industries, Suprabha Protective Products Pvt Ltd etc., are involved in this fraud by ....
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....earlier to the said date, the OC would had claimed for the same before claiming for the latest invoices, which the OC has not done. This clearly explains that there were no old pending invoices earlier to the said date. As a general practice any vendor would insist for clearing previous invoices before clearing the latest invoice. But, in this case the OC had cleared latest invoices and suddenly brought old dated invoices into picture and claimed for the same which is suspectful in nature. (iv) The CD has already brought to the notice of the OC that a detailed investigation and audit is going on against the fraud occurred and also informed the OC that there are so many fake invoices, which CD came across in OC's case. Further, the CD has to receive payment from the OC against the material supplied also. The CD has also came to know that some of the materials were returned to CD by the CD's employees, who colluded with OC without any waybill, invoice or delivery challans. There are several instances where the CD found that fictitious invoices were raised without supply of materials. The CD has strong supporting evidence to provide how fictitious invoices were raised without....
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....pute as to the operational debt is spurious and moonshine defence. In Paragraph XLIV, following has been observed by the Adjudicating Authority: "XLIV Therefore in the light of our discussion as above and considering the submissions made by the learned PCS for the petitioner and the learned senior counsel for the respondent, we are satisfied that the petitioner has established existence of operational debt of a sum over Rs. One crore due and payable by the respondent and its non-payment. We are also fully satisfied that the plea of pre-existing dispute as to the operational debt is spurious and moonshine defence." 38. The Adjudicating Authority under the heading 'Finding' in the impugned order has given reasons for rejecting the defence raised by the Appellant. The Adjudicating Authority on question whether the documentary evidence furnished with the application shows that the operational debt of a sum over rupees one crore, has returned a finding that the OC has been able to prove the debt by giving following reasons: (i) Contention of the OC that the CD had claimed credit input pursuant to filing GST R1 by the OC is not disputed by the Respondent. When it is ....
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....d under the said invoices. The contention of the Petitioner that the respondent had claimed credit input pursuant to filing GST R1 by the Petitioner/operational creditor, is not disputed by the respondent." 42. When there was no pleading in Section 9 petition that CD has taken input credit pursuant to filing of GST R1 by OC, there is no question of any denial by the CD before the Adjudicating Authority. Learned Counsel for the Respondent had submitted that in the written submission, which was filed before the Adjudicating Authority, a submission was raised by Respondent No.1 that CD has taken input credit. We are of the view that Adjudicating Authority has unduly drawn adverse inference against the CD and observation of the Adjudicating Authority that CD has not disputed the claim of input credit, is wholly erroneous. The learned Counsel for the Appellant has submitted before us that the CD has never taken input credit with respect to invoices in question. Learned Counsel for the Appellant elaborating his submissions contended that it was pleaded by the CD before the Adjudicating Authority that 14 invoices on the basis of which petition under Section 9 was filed were never earli....
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....TR-2B and ITC carried forward and reconciled in the correct financial year. A copy of the Annual Return and Reconciliation Statement i.e. GSTR-9 and GSTR-9C of FY 2021-2022 along with GSTR 2A is attached and marked as ANNEXURE-1 (Colly.)." 43. For the purposes of the present case, we need not ponder with respect to above submissions of the parties any further. 44. As noted above, the OC before the Adjudicating Authority has not claimed in Section 9 petition that CD has taken input credit on GST paid by the OC on the invoices in question. There was no occasion for the CD to make any pleading or rely on any material before the Adjudicating Authority on the above question. Moreso, mere payment of GST by OC on the invoices in question shall not make the invoices unquestionable and payment of GST cannot lead to mean that transaction is beyond the shadow of any controversy. As noted above, the GST Authorities assessed the OC for the Financial Year 2021-22, which assessment order has been brought on record, which assessment shall be noticed by us hereinafter. 45. The Adjudicating Authority has relied on debt acknowledgement letter dated 15.03.2022 and affidavit of undertaking to ....
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....Limited is also liable to pay Interest on Delayed payments at mutually agreed rate, and Penal Charges on the amounts due and payable. 7 That this AFFIDAVIT is being Executed and Signed by me voluntarily, out of my own free will, and without any Coercion. Sworn and Signed under Witness on this the 15th March 2022, at Jeedimetla Hyderabad." 46. The CD in its reply to Demand Notice dated 15.06.2022 has already communicated to the OC that a fraud has been committed in factory of the CD by vendors in collusion with certain employees of the CD and investigation and audit has commenced on 22.12.2021. It is further relevant to notice that the FIR which has been lodged by the CD against some of its employees, also included Mr. Allu Nagesh, the person who has given affidavit in favour of the OC along with officials of the OC. Mr. Allu Nagesh and other officers of the CD and OC were arrested and chargesheets were filed against them. Thus, the affidavit which is relied by the OC in Section 9 petition is an affidavit obtained from a Director of the CD against whom collusion has been alleged. When we look into the contents of the affidavit as noted above, it is clear that th....
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....Page 326 of paper book, it is a letter written by OC to CD dated 31.03.2022 on the subject 'Account Balance Confirmation'. Letter dated 31.03.2022 reads as follows: "AS METCORP PVT LTD. Off: Plot No:85, Road No:2 Vahini Nagar, Sikh Village Secunderabad 500 009 Telangana State GSTN: 36 AANCA 0729 N 12B CIN: U74900TG2014PTC096666. Email: ****com.in Mobile 91-4392588825 Date: 31.03.2022 To, M/s KLSR INFRATECH LIMITED. Η.Νο 2-56/0/213/9A & 9B, Flat No 48 KLSR Towers, Ayyappa Society, Madhapur Hyderabad 500 081. Sir/Madam, Sub: Account Balance Confirmation or 3200) This is to inform you that, you were due to our Company a sum of Rs. 2,88,79,419.94, (Rupees Two Hundred and Eighty Eight Lakhs Seventy Nine Thousand Four Hundred and Nineteen Paise Ninety Four Only) as on 31 March 2022. Request you to confirm the above balance, by way of acknowledgement of this Letter and the Ledger Extracts appended herewith. In case your records are not in full agreement with the Ledger Extracts attached herewith, please provide us with the details shown in your recor....
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.... already held that payments made by the CD on 18.03.2022 to its Bank was towards payment of LCs, which payments were to be cleared by the CD against the LCs, which cannot be said to be payment by the CD to OC. Payment by CD to OC was made only on 20.12.2021 against which payment the CD was obliged to pay the Bank, the amount paid against the LCs along with interest. It is, thus, fully proved from the materials on record that no payments were made by the CD to the OC after 20.12.2021 and Adjudicating Authority's finding and observation that the payments were made by the CD to the OC even after December 2021 without any demur, is erroneous and against the record. 52. The observation of the Adjudicating Authority that post December 2021 part payments made by the CD to the OC is incorrect and is not borne from record. Thus, the above reason also given by the Adjudicating Authority for rejecting the defence of the CD as spurious and moonshine defence, is clearly unsustainable. 53. The observation of the Adjudicating Authority that the plea of pre- existing dispute which the CD is trying to cull out from reply notice dated 15.06.2022 is a feeble contention, on the finding that paym....
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....en the parties regarding claim under invoices had arisen in December 2021 itself. Thus, the very basis of foundation of order of Adjudicating Authority that post December 2021 the CD has made payment to the OC is fallacious and against the record. 55. Learned Counsel for the Respondent has contended that the invoices which were claimed by the CD as fake and fictitious invoices are issues, which are beyond the remit of Adjudicating Authority in adjudication under Section 9. From the replies to Demand Notice and Section 9 petition, it is apparent that CD's defence was not only confined to alleging fictitious invoices and invoices with respect to which no goods were supplied, rather there were other pleas, which were borne out from the record, which clearly proves that defence raised by the CD, cannot be said to be untenable, spurious and moonshine. We need to refer to few parts of the reply to Demand Notice and reply to Section 9 petition in the above context. One of the pleas raised by the CD in reply to Demand Notice is that certain materials were returned to OC by employees of the CD. In reply to Section 9 petition, it was specifically pleaded that materials against Invoice Nos....
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....raised by the CD in its reply, the Adjudicating Authority has jumped to the conclusion that defence is spurious and moonshine. It is also relevant to notice that Adjudicating Authority itself in the impugned order has rejected the plea raised by the OC that pre-existing dispute, cannot be raised in reply to Section 9 application. Rather, the Adjudicating Authority held that the CD can raise such dispute in reply/ counter affidavit. We may notice observation of the Adjudicating Authority in Paragraph 35, which is as follows: "XXXV Having heard the Ld. PCS for Petitioner and the Ld. Sr. Counsel for the respondent, and on careful perusal of the record, at the outset, we state that there is no bar under the law that merely because the Corporate Debtor failed to raise the dispute before the receipt of the demand notice, he shall not raise such dispute in the reply/ counter. Reliance, in this regard, can be placed on the ruling of the Hon'ble NCLAT, in the matter of M/s Brand Realty Services Limited Vs. Sir John Bakeries India Pvt Ltd., in CA (AT) (Insolvency) No. 958 of 2020, wherein it has been held as follows: "The statutory scheme under Section 8 and 9 does not indi....
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.... and 229 in its Demand Notice and Section 9 petition, the defence raised by the CD that materials were returned, cannot be said to be without support of any material and was very well a pre-existing dispute. 59. In view of the foregoing discussions, we do not subscribe to the view taken by the Adjudicating Authority rejecting the defence, taken in reply to Demand Notice and counter affidavit on the ground that the defence is spurious and moonshine. A plausible contention was raised by the CD in its reply to Demand Notice within the meaning of Section 9 sub-section 5(ii) (d). 60. In view of foregoing discussions, we answer Question Nos.(I) and (II) in following manner: Answer to Question No.(I) Reply dated 15.06.2022 issued by CD in response to Demand Notice dated 31.05.2022 is notice of dispute within the meaning of Section 9 sub-section (5) of the IBC. Answer to Question No.(II) Defence raised by the CD in reply to Demand Notice dated 15.06.2022 (Notice of dispute) as well as in reply to Section 9 application, cannot be held spurious or moonshine defence and the application under Section 9 was required to be rejected under Section 9 sub-section (5)(ii)(d) of the ....
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.... that is expected from the respondent which is disputing these invoices is to exercise its statutory right of raising a dispute before the Authorities under the GST, Act stating that the said invoices are fake by submitting GST R-3, so that, the genuineness or otherwise of the subject invoices would have been decided." 63. The above observation of the Adjudicating Authority has been again reiterated in Paragraph XLI of the order. The Adjudicating Authority observed that "the least that is expected from the Corporate Debtor which is vehemently disputing the invoices is raising a dispute before GST Authorities by submitting GST R-3 to the authorities, so that the genuineness or otherwise of the subject invoices would have been decided by the competent authorities under the GST Act". The Adjudicating Authority itself in the impugned order has drawn adverse inference that CD has not raised dispute before the GST Authorities regarding invoices. In above view of the matter, the assessment made by GST Authorities of the OC of the relevant year is, thus, clearly relevant and has been taken on record in this Appeal by our order dated 09.02.2026 as noted above. 64. Learned Counsel for ....
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....025, the OC has not left any stone unturned to somehow not permit this Tribunal to look into the said order. We having allowed the application - IA No.7775 of 2025 and having taken the assessment order on record, the said assessment order needs to be looked into to find out what GST Authorities have now held with regard to assessment of the OC, which is relevant for the present case, since the assessment is for the year 2021-22, during which period, 15 invoices have been claimed by the OC. The order dated 02.07.2025 is very detailed, which assessment was made consequent to revised show-cause notice issued consequent to inspection conducted by Joint Commissioner (ST) and verification of the documents at the time when GST returns filed by the tax payers, i.e. M/s A.S. Met Corp Pvt. Ltd. In Paragraph-1 of the order, while giving brief facts of the case, the assessment order made following observations: " xxx xxx xxx Even after the department supplied copies of the seized materials on multiple occasions, the taxpayer raised trivial objections, such as the folding of a single paper, evidently with the intent to delay proceedings. The taxpayer's actions suggest a ma....
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....LIMITED Hyderabad/500055 HYDERABAD/500055 121368863101- 24/08/2021 11:30:00 GST/21-22/0116 24/08/2021 29.320 26,97,440.00 4,85,539.20 72112350 CRFH STEEL STRIPS AP29TB 5577 101386725324 36AAECK2226P1ZA / M/S KLSR INFRA TECH LIMITED HYDE RABAD/5000 55 HYDERABAD/500055 101386725324 - 08/10/2021 17:22:00 GST/21-22 /0181 07/10/2021 33.660 30,96,720 .00 5,5 7,4 09. 60 72 11 23 50 CRF H STE EL STRI P AP2 9TB 557 7 111386728892 36AAE CK222 6P1ZA / M/S KLSR INFRA TECH LIMITED HYDERABAD/ 500055 HYDERABAD/500055 111386728892 - 08/10/2021 17:27:00 GST/21-22/0182 07/10/2021 30.13 0 27,71,960 .00 4,98,952. 80 721123 50 CRFH STEEL STRIPS AP2 9TB 567 6 1913867315 26 36AAE CK222 6P1ZA / M/S KLSR INFRA TECH LIMITED HYDE RABAD/5000 55 HYDERABAD/500055 191386731526 - 08/10/2021 17:31:00 GST/21-22/0183 07/10/20 21 29.320 26,97,440 .00 4,85,5 39. 20 721123 50 CRFH STEEL STRIPS AP2 9TB 557 7 Further, on verification of the ITC claim particulars of KLSR Infratech Limited, it was confirmed that no ITC was claimed by the recipient KLSR Infratech for ....
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.... tax indicated in the eway bill. It clearly confirms that e-waybill was generated without supply of any goods. The above e-waybills (Sl.No:29 and 31) were generated from A S Met Corp Private Limited, Hyderabad to KLSR Infratech Limited, Hyderabad for Invoice number GST/21- 22/0181- 07/10/2021(e-waybill 101386725324) and GST/21-22/0183-07/10/2021 (e-way bill 111386728892) to transport goods within the city of Hyderabad. But vehicle movement of the said vehicles on 05.10.2021 to 11.10.2021 is in different direction and was moved from Ghatkesar to Korlapad on 06.10.2021 and no return movement to Hyderabad. Hence, there was no link between the transactions indicated in the e-waybills, the movement of vehicle actually took place and the amount of tax indicated in the ewaybills. Further, it was found that the said invoices are duplicate and replicate of another invoices bearing number GST/21-22/0114 dated 23.08.2021 and GST/21-22/0116 dated 24.08.2021 respectively with same quantity, value, vehicle number also which is clearly discussed in subsequent paragraphs. Further, on verification of the recipient particulars and other details, it was confirmed that no ITC was claimed for ....
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....R INFRA TECH LIMITED HYDE RABAD/5000 55 HYDERABAD/500055 191386731526 - 08/10/2021 17:31:00 GST/21-22/0183 07/10/20 21 2 9. 3 2 0 26,97,440 .00 4,85,5 39. 20 7211' 23 50 CRFH STEEL STRIPS AP2 9TB 557 7 A.S.Met Corp Private Limited had raised Invoices 181, 182 and 183 just as a duplicate/replicate of invoices 114, 115 and 116 with same quantity, rate, value and vehicle number. A.S. Met Corp Private Limited issued invoices numbered 181, 182, and 183 as exact duplicates or replicas of invoices 114, 115, and 116, respectively. These duplicate invoices mirror the same quantity, rate, value, and even the vehicle number. Specifically, invoice number 181 is a duplicate of invoice 114, 182 is a duplicate of 115, and 183 is a duplicate of 116. This duplication of invoices is a clear indication of fraudulent activity, as it is highly improbable for identical transactions, including vehicle details, to occur in this manner. Achieving identical weights in steel industry for any coil is not at all possible. For instance, if we have acquired 1000 tons of material and need to load 10 tons in each vehicle, the weight of each coil would be diffe....
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....The assessment order, which subsequently came and is taken on record, fully proves and strengthens the case, which was setup by the CD before the Adjudicating Authority. 72. At this stage, we may also notice the averments made by the CD in Paragraph-1(I) of the reply to Section 9 application, where CD has pleaded following: "1.(I) I submit that the respondent CD is a Public Limited Company having authorized share capital of Rs. 21,00,00,000/- and a paid up capital of Rs. 20,31,16,000/-. The CD is a company engaged in contracting the works, relating to rural water supply, road works, etc, and had an average annual turnover of over Rs. 300,00,00,000/- (Three hundred crores) in the last five financial years as under: Year Turnover (Rs.) Declared profits 2017-18 4,01,62,49,245 28,22,18,493 2018-19 3,25,64,21,168 25,37,24,145 2019-20 2,46,02,80,220 20,58,48,721 2020-21 2,67,84,18,076 22,67,28,091 2021-22 4,05,02,89,437 39,59,18,441 The company is making continuous profits, as is evident from the aforesaid facts and figures, but not an insolvent company, unable to pay its' debts." 73. Learned Counsel for th....