2025-VIL-477-ALH
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SGST High Court Cases

GST - Fraudulent input tax credit - Proprietor was engaged in creation of fake firms, which were used for availment and passing of fraudulent input tax credit to various end users without any supply of goods or services. The petitioner's registration was cancelled, and a demand was raised. The petitioner filed a writ petition challenging the show cause notice and the order-in-original - Whether the writ petition was maintainable bypassing the alternative remedy of appeal under the Act – HELD - In a case of fraudulent availment of ITC based on supply from non-existent firms and without receiving any actual supply, the plea would always fall within the parameters of Section 74 of the CGST Act, 2017 as the same would be 'input tax credit wrongly availed or utilised by reason of fraud or any wilful misstatement or suppression of facts'. The fact that the input tax credit was availed based on fake supplies does not mean that the provisions of Section 74 would not apply - the ITC would be available to a dealer only after he discharges the burden to establish actual receipt of goods, and mere production of invoices and payment to the selling dealer by account payee cheque is not sufficient - the pleas raised by the petitioner and the reply to the show cause notice had been appropriately dealt with by the adjudicating authority. The writ petition was not maintainable, and the petitioner should avail the alternative remedy of appeal in accordance with the law – The petition is dismissed
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