Case Law Details
Neha Agrawal Vs The Commissioner of CGST and Central Excise (Bombay High Court)
A recent case before the Bombay High Court has brought attention to allegations of wrongful input tax credit (ITC) availing in the realm of Goods and Services Tax (GST). The applicant, engaged in the trade of goods, faces accusations of availing over Rs. 9 crore worth of ITC without receiving the associated goods. The twist in this case lies in the retrospective cancellation of the suppliers’ registrations, which has now put the applicant in a legal quagmire. The GST authorities sought to arrest the applicant, arguing that this falls under the non-bailable and cognizable offense category, governed by Section 132 of the Central Goods and Services Tax (CGST) Act.
Detailed Analysis
1. The Accusations: The heart of the matter revolves around the applicant’s alleged misuse of ITC. It’s claimed that the applicant availed ITC using invoices without any actual goods supply, thereby violating the CGST Act. The amount in question is substantial – a staggering Rs. 9,08,24,743.
2. A Legal Twist: At first glance, it appears to be a straightforward case of ITC misuse. However, the case takes an intriguing turn due to the retrospective cancellation of the supplier’s registrations. One of the primary suppliers, M/s. Sunshine Traders, played a central role in the alleged wrongful ITC availing, amounting to Rs. 7.74 crores. The GST authorities had canceled the registration of M/s. Sunshine Traders, suggesting that it didn’t exist during the period when the applicant availed ITC. However, this situation changed due to a significant development.
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