The Gujarat High Court ordered further investigation in respect of provisional release of goods as there is an alleged wrongful availment of Input Tax Credit (ITC).
The petitioner, Madhav Copper Ltd. is a company incorporated in the year 2012 which is engaged in the business of Copper Products and is a leading manufacturer of various products of copper like Copper Rod, Copper Wire, Fiberglass Conductor etc. The petitioner no.1 also imports raw-materials/ scraps for manufacturing these products and export final products made out of the copper. It has its own Certificate of Importer-Exporter Code (IEC). The petitioner also supplies to the reputed private entities and government entities across India. All requisite licences are with the petitioner for the purpose of manufacturing at their factory at Bhavnagar.
The allegations made are of such a nature that the respondents have collected the material from the business premise during the investigation revealing that the company has availed the Input Tax Credit by engaging in billing transactions for wrongful availment of the ITC, the huge amount of ITC to the tune of Rs. 137 Crores is alleged to be fraudulently claimed by the petitioner and according to the petitioner, the cancellation of registration number of the companies with which it was dealing would not be in many manner putting an onus on the petitioner company. Here is a public limited company, the allegation of wrongful availment of Rs. 137 Crores and attachment order is without any credible material on record. According to the petitioner, unless the show cause notices are decided, it will be wrong to say on the part of the respondent that 36 registered dealers who had the GSTN and which were active on the date of supply of the goods and who had also filed the regular returns under the GST, for any default on their part, liability cannot be shifted on the petitioner. This version is already before the concerned authority for him to consider.
Advocate Mangukiya appearing for the petitioners has urged that the directors of the petitioner company have been cooperating with the Investigating Agency. Exhaustive statements of theirs have been recorded and therefore, there will not be any requirement for them to once again be called by the officer concerned, except for the purpose of their arrest in wake of the rejection of the anticipatory bail and according to him, that is impermissible.
The division bench of Justice Sonia Gokani and Justice Nisha M.Thakore held that so far as the operating of the current account in Bank of Baroda, the credit of the ITC worth Rs. 3 Crores and unlocking of the same, no order is presently needed to be passed. The same is urged before the respondent already and the same shall be considered by the concerned authority at the time of adjudication.
“The company shall provide the details of every transaction physically as well as through e-mode to the Revenue Authority without fail. As ensured before this Court, all the transactions of the supply shall be monitored by the Deputy Commissioner of State Tax Department, Bhavnagar,” the court ordered.
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