GST Update

 Desk of CA. Praveen Sharma – 839 Series (CAPS) 

Delhi High Court in the case of TReco Wire India Pvt. Ltd

Case Background:

? The petitioner challenged the Order-in-Original dated 27 January 2025 confirming a demand of ?1.11 crore, including ITC reversal, interest, and penalty. The case originated from a DGGI investigation involving bogus suppliers, mainly M/s Balaji Sales Corporation.

Findings of Investigation:

? The DGGI found M/s Balaji to be a fake entity issuing invoices without actual supply. Out of 377 e-way bills, 100 vehicles were fictitious. The petitioner allegedly availed fraudulent ITC of ?29.9 lakh based on such invoices.

Proceedings Before Authorities:

? Despite repeated summons, the petitioner failed to appear or provide proof of genuine trade. The Adjudicating Authority proceeded ex-parte and confirmed the demand under Section 74 of the CGST Act.

Petitioner’s Contentions:

? The petitioner argued that (a) the electronic cash ledger was blocked without notice, (b) replies were duly filed, and (c) there was a breach of natural justice. A constitutional challenge to Section 16(2)(c) was also raised.

Revenue’s Stand:

? The department argued that the petitioner’s reply lacked merit and failed to prove genuine purchases. The existence of registration could not validate fraudulent ITC claims.

Court’s Observations:

? The Court noted that no appeal under Section 107 was filed within the prescribed time and that the order had become final. Delay in pursuing the writ could not override the statutory remedy.

Final Decision:

? The writ petition was dismissed, upholding the findings of fraudulent ITC availment and denying relief for unblocking of the cash led

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Regards
CAPS