Auditor Generated Fake Invoices and Records in GSTR -1 Return: Madras HC Orders Fresh Adjudication [Read Order]
The Court also permitted the GST Department to initiate appropriate proceedings against the fifth respondent if it was found that no genuine supply had occurred during the period in question.
Auditor - Fake Invoices and Records in GSTR -1 Return - Madras HC - Fresh Adjudication - taxscan
Auditor - Fake Invoices and Records in GSTR -1 Return - Madras HC - Fresh Adjudication - taxscan
The Madras High Court, has remitted a GST ( Goods and Services Tax ) order back to the assessing authority for fresh adjudication after it was found that the petitioner’s auditor had allegedly generated fake invoices and recorded them in the GSTR-1 returns without the petitioner’s knowledge.
The petitioner, Sri Sarguru Associates, represented by its proprietrix Tmt. S. Pushpalatha, had challenged the assessment order dated 29.04.2024 passed under Section 73 of the Tamil Nadu Goods and Services Tax Act, 2017, read with the Central GST Act, 2017.
The order had been passed following a show cause notice issued on 27.12.2023, to which the petitioner had not submitted any reply.
It was contended that the petitioner’s auditor misused the authorization and created fictitious invoices for the months of November 2018 and January 2019, showing sales to Janse Manpower Services (the fifth respondent) without any actual supply of goods.
These fabricated invoices were uploaded in the petitioner’s GSTR-1 return, enabling the fifth respondent to avail of input tax credit wrongfully.
The petitioner alleged that the auditor had been involved with the fifth respondent to generate these fraudulent transactions, resulting in an unjust tax liability being imposed on the petitioner.
The petitioner had also lodged a police complaint before the Selaiyur Police Station during which the fifth respondent had reportedly admitted guilt regarding the manipulation.
Justice C. Saravanan observed that whether the supply had actually taken place could not be conclusively determined in the writ proceedings.
Accordingly, the Court remitted the matter to the Deputy State Tax Officer, Kancheepuram Assessment Circle, for fresh consideration on merits.
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The Court also permitted the GST Department to initiate appropriate proceedings against the fifth respondent if it was found that no genuine supply had occurred during the period in question.
Additionally, the Court clarified that the petitioner was at liberty to recover the amounts from the fifth respondent based on the admission made before the police.
While setting aside the assessment order, the Court directed that the matter be adjudicated afresh. Accordingly, the matter was disposed of.
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