The Gauhati High Court directed the authority to pass a reasoned order in respect of Accused taxpayers involved in passing on fake Input Tax Credit without movement of actual goods.
During the investigation, it was found that the taxpayer, Krit Kunal Dhawan has utilized ITC from dubious firms. It has been reported in print and electronic media that these taxpayers are involved in bill trading and passing on fake ITC without movement of actual goods therefore ITC claims from these firms by the taxpayer are sought to be reversed with the levy of interest and penalty as per Assam GST Act 2017.
The notice in the Form GST DRC-01 was issued against the petitioner which is a form under Rule 142(1)(a) of the AGST Rules.
Before issuing the Form GST DRC-01 the petitioners were issued a summon on 10.09.2021 for further investigation. Pursuant thereof, the petitioner appeared on 23.09.2021 and requested time up to 30.09.2021. The said request to defer the investigation up to 30.09.2021 was agreed upon but however, the petitioner taxpayer failed to appear on 30.09.2021. On the other hand, Dr. A. Saraf learned senior counsel for the petitioner upon instruction has made a statement that the petitioner was ready with all relevant materials on 23.09.2021 itself to satisfy the authorities as regards their investigation. But on the said date, the required procedure could not take place.
The single judge bench of Justice Achintya Malla Bujor Barua held that ends of justice would be met if an opportunity is given to the petitioner taxpayer to appear before the respondent Joint Commissioner of State Taxes, Guwahati with all relevant materials that he may desire to rely upon and satisfy the authorities in their investigation pursuant to the earlier summons dated 10.09.2021. Accordingly, as agreed upon by the parties, the petitioner shall appear before the Joint Commissioner of State Taxes, Guwahati on 08.11.2021 on 11.00 am and upon his appearance, the aforesaid authority shall give due audience to the petitioner and take on board all such relevant materials that he may produce as well as the contention that the petitioner may desire to raise.
“The reasoned order to be passed shall prevail and till such reasoned order is passed, the Form GST DRC-01 both dated 08.10.2021 shall be kept in abeyance. In the event, the reasoned order goes in favour of the petitioner it has to be understood that the said Form of GST DRC-01 will no longer remain effective and in the event, it is against the petitioner, a fresh Form GST DRC-01 may be issued and in doing so adequate time required under the law shall be given to the petitioner before taking any action,” the court said.
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