GST Update

Desk of CA. Praveen Sharma – 860 Series (CAPS) 

Madhya Pradesh High Court – M/s Elora Tobacco Company Ltd. (Justice Vivek Rusia)

The petitioner, a cigarette manufacturer, filed a writ petition under Article 226 without challenging any specific order, even though earlier proceedings already addressed the issue of seized documents. The DGGI’s 2020 investigation exposed a large-scale tax evasion racket in the tobacco and pan masala industry, with evidence of tampering in DG set readings and unaccounted production.

Two show cause notices were issued in 2022 alleging GST evasion of ?151.64 crore and excise duty evasion of ?76.68 crore for FY 2017–2020. Earlier, in W.P. No.12326/2024, the High Court directed the department to return unused seized documents and permit cross-examination, which the Supreme Court later upheld.

Despite these directions, the petitioner filed another writ seeking copies of internal departmental records and further cross-examination. The Court found that the new writ repeated earlier reliefs without any fresh cause of action and appeared intended only to delay adjudication. It clarified that under Section 35 and Rule 56 of the CGST Act, the responsibility to maintain records lies with the manufacturer, not the GST officers.

Finding the petition frivolous and malafide, the Court dismissed it with a cost of ?2,00,000 payable to the department within four weeks.

Link: CA. Praveen Sharma on Linkedin

Regards 
CAPS