TaxTMI 
TaxTMI 
2026 (8) TMI 1843
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.... (ii) availment of irregular excess Input Tax Credit amounting to Rs. 1,48,84,011/- in GSTR-3B as compared to Input Tax Credit available in GSTR-2A for the period in question. Thus the total principal demand of Rs. 2,37,41,051/- with interest and penalty aggregating to Rs. 6.3 Crores. 3. It is further submitted that a report was already in circulation intimating the names of suppliers who had not filed GSTR-3B and the fact that the petitioners is one of the beneficiaries of one such supplier who did not file GSTR-3B was detected upon an enquiry conducted by the Department. The authority concerned had already initiated separate proceedings for recovery of inadmissible Input Tax Credit through one M/s. Aster Trading Company who had failed to file GSTR-3B for the Financial Year 2019-20 and had filed returns only for January 2018 and February 2018 and did not file returns for the subsequent period. 4. Thereafter the petitioners on various occasions intimated the Department with supporting documents regarding reversal amendment of inadmissible Input Tax Credit by the suppliers and requested inter alia, that inadmissible credit along with applicable interest and penalty be recov....
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.... claim of ITC. Clause (g) of the section 9(2) of the DVAT Act states that to the dealers or class of dealers unless the tax paid by the purchasing dealer has actually been deposited by the selling dealer with the Government or has been lawfully adjusted against output tax liability and correctly reflected in the return filed for the respective tax period, would not be eligible for claim of ITC. The question that arose for consideration was as to whether for the default committed by the selling dealer can the purchasing dealer be made to bear the consequences of the denying the ITC and whether it is the violation of Article 14 of the Constitution. After taking note of the language used in section 9(2)(g) of the DVAT Act where the expression "dealer or class of dealers" occurring in section 9(2)(g) of the DVAT Act should be interpreted as not including a purchasing dealer who has bona fide entered into purchase transaction with validly registered selling dealer who have issued tax invoices in accordance with section 15 of the said Act where there is no mismatch of transactions in Annexures 2A and 2B and unless the expression "dealer or class of dealers" in section 9(2)(g) is read dow....
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....Petition which was dismissed by the Hon'ble Supreme Court on 14.12.2023, thereby attains finality. 9. It is submitted that the Show Cause Notice dated 06.12.2025, which is pari materia with the present Show Cause Notice dated 11.06.2025, the allegation was that the 4th respondents has not shown bill in GSTR-1 and hence the appellant is not eligible to avail credit of the input tax as per section 16(2) of the WBGST Act, 2017, as the tax charged in respect of such supply has not been actually paid to the Government. 10. The mandate of the statute under Section 73(10) of the CGST Act is to issue a Show Cause Notice within three years from the due date of filing of the annual return whereas in the present case the period in question i.e. 2018-19 and 2019-20 was beyond three years. Therefore, the Department has invoked Section 74 of the CGST Act, 2017 of the CGST Act, 2017 to circumvent the period of limitation. Such invocation is a colorable exercise. The ingredients of Section 74 - fraud, willful mis-statement, suppression of facts- have not been demonstrated in the Show Cause Notice to the extent of willful mis-representation and suppression allegedly committed by the petitione....
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....as discussed in paragraph Nos. 3.5 and 3.6 of the Show Cause Notice have been detected, otherwise the same would have remained unnoticed and the petitioners being the recipients would continue to enjoy the unlawful benefits. The petitioners were afforded ample opportunity of hearing to substantiate their claims in respect of the amendment of the Input Tax Credit. However, the petitioners failed to comply with the same. 15. Learned counsel appearing on behalf of the respondent authorities relied upon the judgment of Fanmade11 Fantasy Sports Pvt. Ltd. Vs. Union of India (W.P.(C) No.174 of 2026), the relevant paragraphs are quoted below:- "7. Dr. S. Muralidhar, the learned senior counsel appearing for the petitioner would submits that the despite there being an interim order passed by this Court that no coercive steps shall be taken against the petitioner, the Assessing Officer proceeded with the hearing of the impugned show cause notice and passed the final order of assessment determining the tax liability of the petitioner to the tune of Rs. 6.3 Crore. 8. We are of the view that since final order of assessment has already been passed, the petitioners may now pre....
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..... (supra) affirmed by Supreme Court on 14.12.2023 and Arise India Ltd. affirmed by Supreme Court on 10.01.2018. a. This Court observes that the Show Cause Notice does not allege that the petitioners were not in a possession of a tax invoice issued by the supplier registered under the Act. There is no denial of the fact that the petitioners have received the goods or services or both. Therefore, conditions under Section 16(2)(a) and 16(2)(b) of the CGST Act are satisfied. The only dispute is under Section 16(2)(c) where tax charged actually has been actually paid to the Government. b. The department itself admits that the proceedings have been initiated against a supplier namely, M/s. Aster Trading Company for non-filing of GSTR-3B for the Financial Year 2019-20. Having done so, the department cannot doubly recover, once from the supplier and again from the recipients. The department must first proceed for recovery against the defaulting supplier under Section 79 of the CGST Act. Mere non-reflection of invoices in GSTR-2A cannot by itself lead to automatic denial of Input Tax Credit to a bonafide purchaser. No allegation of collusion between the petitioners and M/s....
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...., the writ is maintainable as held in the case of Whirlpool Corporation Vs. Registrar of Trademarks reported in 1998 (8) SCC 1. 21. In view of the above discussions made herein and in view of the law laid down in Suncraft Energy Private Limited (supra) which has been affirmed by the Supreme Court on 14.12.2023, this Court is of the view that the impugned Order in Original suffers from non-application of mind, violation of principles of natural justice and is without jurisdiction to the extent it invokes section 74 CGST Act, 2017 for the period 2018-19 and accordingly the Writ Petition is disposed of the with the following directions:- I. The Order in Original dated 09.12.2025 passed by the respondent authorities along with the consequential recovery notice dated 12.06.2026 is hereby quashed and set aside. II. The respondent No. 1 is directed to revisit the issue involved herein in the present Writ Petition by reconsidering the reply dated 10.11.2025 filed by the petitioner, along with all documents, in the light of the judgments relied upon by the petitioners namely Suncraft Energy Private Ltd. (supra) and G.R. Infra Projects Private Ltd. Ratlum passed by the H....