2026-VIL-275-GSTAT-AGR
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SGST Tribunal

GST - Imposition of penalty under Section 122(1) of the CGST Act, 2017 for issuing and availing invoices without actual supply of goods, where the declared place of business was found vacant and stockless - Respondent-taxpayer was found on inspection to have closed premises with a notice of vacancy and no stock - Proper Officer passed the order ex parte, held that the Respondent had merely obtained and issued invoices without actual purchases and sales and imposed penalty - The FAA set aside the penalty - Whether the Respondent carried on genuine trading activities or the transactions were mere paper entries - HELD - The closed premises, the notice of vacancy and the absence of stock on the date of inspection cannot by themselves conclusively establish that no genuine business was carried on earlier. The mere assertion that business was conducted and stock disposed of is also insufficient. The genuineness of the transactions requires examination of contemporaneous records collectively, such as invoices, registers, transport documents, weighment slips, freight payments, records of machinery and operational expenses, bank statements and e-way bills, and the absence of one document is not conclusive proof of fictitious transactions - The subsequent cancellation of a supplier's registration does not by itself establish that earlier supplies were fictitious, and the alleged discrepancies in e-way bills must be examined on the material - The FAA did not verify these records, and the Proper Officer passed the original order ex parte without an effective opportunity of hearing - The orders of the Proper Officer and the FAA are set aside, the appeal of the Department is partly allowed and the matter is remanded for fresh adjudication after affording a personal hearing - The departmental appeal stands disposed of
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