2026-VIL-330-BOM
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SGST High Court Cases

GST - Blocking of Input Tax Credit, Unregistered supplier – Issue of show cause notices/intimation notices proposing block of available ITC, alleging that the suppliers were unregistered entities and that the petitioners availed fraudulent ITC on the strength of bogus invoices without actual movement of goods or services – HELD - The CGST Act, along with the Rules framed thereunder, constitutes a complete code governing the framework within which the Department is required to act. Blocking of ITC undoubtedly has adverse consequences and affects the right of registered persons to carry on business activities. However, each case must be examined on its own facts to determine whether the action proposed by the Department is based on tangible material and whether there exists a rational basis for invoking the statutory machinery. Situations involving fake or bogus ITC cannot be countenanced under the provisions of law governing the utilization of input tax credit - Insofar as the show cause notices or pre-intimation notices are concerned, they are required to be decided on the facts of each individual case. A collective adjudication on merits of individual issues is certainly not possible - It would be premature to entertain the challenge to the validity of Section 16(2)(c) of the CGST Act at this stage, before the adjudication of the show cause notices. The petitioners shall be permitted to file their replies to the show cause notices and the notices shall thereafter be adjudicated in accordance with law, after considering all contentions raised by the petitioners. In cases where only a pre-show cause intimation has been issued, the concerned authority shall grant an opportunity of hearing to the petitioners and take an appropriate decision - In regard to the challenge to the vires of Section 16(2)(c) of the CGST Act is concerned, all contentions of the petitioners in that regard are kept open to be agitated, if the need so arises, in appropriate proceedings – The writ petition is disposed of
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