Saniya Traders Vs Additional Commissioner (Allahabad High Court)
The Allahabad High Court considered a writ petition filed by Saniya Traders challenging the orders passed under Section 74 of the GST Act, 2017 by the Additional Commissioner and the Assistant Commissioner, Moradabad, concerning the tax period June 2021 for the year 2021-22. The orders under challenge involved reversal of input tax credit (ITC) of ₹4,17,997, interest of ₹1,06,589, and penalty of ₹4,17,997, totaling ₹9,42,584, and the petition sought to prevent initiation of recovery proceedings. The petitioner, a registered dealer engaged in the supply of plastic waste, parings, and scrap of polymers and ethylene, had purchased old scrap batteries from Mohan Enterprises, a registered dealer at the time of the transaction on June 28, 2021. The transaction was documented through a tax invoice and an E-way bill and was reflected in the petitioner’s GSTR-1 returns. The petitioner also discharged its tax liability through the banking channel, and the seller, Mohan Enterprises, had filed its GSTR-1 and GSTR-3B returns.
The GST authorities, relying on an inspection conducted by the Joint Commissioner, alleged that 42 suppliers in Uttar Pradesh did not provide actual inward supplies, suggesting fictitious invoices and inadmissible ITC claims. Based on this, the petitioner’s purchases were treated as non-existent supplies. Notices were issued, and the petitioner submitted a detailed reply demonstrating compliance, including proof that the supplier had filed returns and deposited tax. Despite this, the authorities reversed ITC and imposed interest and penalty, and the appeal filed by the petitioner was dismissed without considering the material on record.
Comments are closed.