2025-VIL-1248-MAD
  1. Home
  2. 2025-VIL-1248-MAD

SGST High Court Cases

GST - Treatment of Supply of tyres, tubes, and flaps (TTF), SCN under Section 74 of the GST Act, 2017 for alleged wrongful availment of input tax credit - The petitioner initially treated the supply of TTF in a carry strapping form as individual supplies, paying tax at the reduced rates applicable to tubes and flaps. However, later the petitioner communicated its intention to treat the supply as a "composite supply" and paid the additional tax due, along with interest, on 21.02.2019 - DGGI initiated an investigation and issued a SCN to the petitioner under Section 74 of the GST Act, alleging wrongful availment of input tax credit - HELD - To invoke Section 74 the Authorities ought to have traced out as to whether there is any evasion of tax in the course of payment of tax dues, the intention of fraud or provision of wilful misstatement or suppression of facts. If the aspects of fraud, misstatement or suppression of facts were not established while issuing the show cause notice, the same would be considered as issued without fulfilling the ingredients of Section 74 of the Act and such notice is liable to be set aside as the same was issued without jurisdiction - The issuance of the SCN under Section 74 is not valid as the respondents had not established the ingredients of Section 74, namely, fraud, wilful misstatement, or suppression of material facts by the petitioner. The petitioner had voluntarily communicated its intention to treat the supply as a "composite supply" and paid the additional tax due, along with interest, prior to the DGGI investigation. At the worst, petitioner's action could be considered as tax not paid or short paid due to confusion in the entire industry and that the petitioner deferred the payment of tax and paid the same, once the doubts had been cleared. The same would attract proceedings under Section 73 of the Act - Further, the question of application of Section 39(9) so as to deprive the petitioner from availing ITC, would not at all arise as the said provision would attract only in the event, if the enforcement action was initiated prior to the intimation by the petitioner to pay the short payment of tax - The petitioner's actions were not motivated by any criminal intent, but rather by the prevailing confusion in the industry regarding the treatment of the TTF supply. The respondents had wrongly invoked the provisions of Section 74 and issued the show cause notice without fulfilling the necessary requirements - The impugned show cause notice is set aside and the writ petitions are allowed
Download File

Quick Search

/

Advance Search

GST Resources

/

Gst Rate Finder

Tax Vista

Your Weekly Tax Recap

By Kasi Viswanathan V

Weekly Summary

VIL Video

GSTR-9 & GSTR-9C of FY24-25
By CA Vivek Jalan

Create Account

Security-Code
New Code?

Log In

New User ? Forgot Password ?

Forgot Password

Security-Code
New Code?
Please Note: This facility is only for Subscribing Members.

Email this page

Feedback this page

Schedule a Demo

Schedule a demo to know the features and advantages of VILGST portal. Get to know the tips to find the desired results in faster way.

Caselaw Request Form (CRF)

Didn’t find what you are searching for? No worries, please give us the following details and VIL will email you the desired Caselaws at the earliest:

Security-Code
New Code?