Narendra Amrutlal Patel And Anr Vs Assistant Commissioner of State Tax And Anr (Bombay High Court)
Issue: Anticipatory bail in a GST Input Tax Credit (ITC) dispute involving alleged wrongful availment of ITC from deregistered suppliers.
Facts & Allegations
The applicants, directors of Jaat Vedas Construction Co. Pvt. Ltd., sought protection from arrest under Section 132 of the CGST/MGST Acts. They were accused of availing wrongful ITC of approximately ₹23 crore, based on supplies from entities whose GST registrations were cancelled.
A show cause notice (22 February 2022) alleged:
- ITC from suppliers whose registration was cancelled (₹2.71 crore).
- Additional ITC from three suppliers (₹3.87 crore).
- Non-payment to suppliers within 180 days of invoices.
- Mismatch between ITC claimed in GSTR-3B and ITC reflected in GSTR-2A.
The company replied, asserting:
- In one case, the supplier’s registration was cancelled after the transaction.
- For the other two suppliers, ITC was claimed only after verifying GSTR-1 and GSTR-3B filings.
- Payments towards disputed ITC had begun (₹2.21 crore paid in instalments).
Despite this, fresh summons under Section 70 were issued in March 2022 regarding other suppliers not mentioned earlier. The applicants contended they had no intent to defraud, the dispute was documentary in nature, and custodial interrogation was unnecessary.
