Case Law Details
Sri Balaji Metals And Minerals Private Ltd. Versus Union of India (Chhattisgarh High Court)
In a significant decision by the Chhattisgarh High Court, Sri Balaji Metals And Minerals Pvt. Ltd. received interim relief in a GST case against the Union of India. The company had been facing investigation from both the Central Goods and Services Tax (C.G.S.T.) and the Directorate General of Goods and Services Tax Intelligence (D.G.G.I.) after their service provider’s registration was cancelled.
The contention of Sri Balaji Metals was that the dual action taken against them was illegal, and the denial of credit based on the supplier being a non-existent entity was incorrect. They also argued that there were no grounds for ‘roving enquiries’ in place of a statutory audit under Section 65 of the GST Act. The court, taking a prima facie view, directed that no further orders would be passed until the next date of hearing, acknowledging that the tax paid was shown on the GST portal of the petitioner.
Conclusion: This decision by the Chhattisgarh High Court comes as a significant relief to Sri Balaji Metals And Minerals Pvt. Ltd. and potentially sets a precedent for similar cases. The final outcome of this case could influence how such disputes are handled in the future, particularly in cases where the registration of a supplier is retrospectively cancelled. It also highlights the importance of the digital GST portal in verifying the payment and credit of taxes. The next hearing, scheduled for the week of July 24, 2023, will be keenly anticipated.
The matter was argued by Ld. Counsel Bharat Raichandani
FULL TEXT OF THE JUDGMENT/ORDER OF CHHATTISGARH HIGH COURT
Shri Bharat Raichandi, Advocate with Shri Ankit Pandey, Advocate for the petitioner.
Shri Ramakant Mishra, Asst.S.G. for the Union of India/respondent Nos.1 & 4.
Shri Vikram Sharma, Deputy Government Advocate for the State/respondent No.2.
Shri Maneesh Sharma, Advocate for the respondent Nos.5 to 8.
Heard.
Learned counsel for the petitioner submits that the petitioner had abade the certain services from the supplier in the year 2018-19 and the outward tax return i.e. tax paid by the such supplier was shown in the portal of the Goods and Services Tax (G.S.T.). The petitioner who abade and filed the services and filed the inward return also shows the said tax has been paid. Since the outward return filed by the supplier shows the payment of tax as such the petitioner was entitled to the input tax credit. He would submit in the meanwhile, on the ground that the supplier is a non-existent. Notices have been issued both by Central Goods and Services Tax (C.G.S.T.) and Directorate General of Goods and Services Tax Intelligence (D.G.G.I.). i.e. investigation wings. Simultaneously, he refers to Annexure P-3 to submit that despite the said roving enquiry could not have been made which is against the statute without an audit.
Shri Maneesh Sharma, learned counsel appearing for the respondent Nos.5 to 8 without filing the reply, makes a submission and submits that there is no denial of input tax credit as on today and no orders have been passed till today.
Be that as it may, considering the documents and submissions, it is directed that since no orders have yet been passed till date, no further adverse orders would be passed against the petitioner till the next date of hearing.
Let the reply of I.A. No.1/2023, application for grant of interim relief/stay be filed by the respondent Nos.5 to 8, thereafter, the same would be considered.
List the case in the week commencing from 24-07-2023.
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