In a case of wrongful availment of ITC, the Gujarat High Court ordered to continue provisional attachment till the conclusion of the adjudication proceedings.
The petitioner, Madhav Copper Limited company engaged in the business of copper and copper scrap faced certain serious allegations in respect of wrongful availment of Input Tax Credit in respect of the financial year 2017-2018 to the financial year 2020-2021 comprising of the period beginning from April 2021 to July 2021, thus extending to the financial year 2021-2022.
Based on a search the Goods and Service Tax Authorities allegedly found that the petitioner was engaged in the purchase of goods from 39 fictitious business firms and fake purchases for all those financial years to the tune of Rs. 770.64 crores were wrongfully made to avail the Input Tax Credit of Rs. 138.71 crores. The authorities termed it as a financial scam committed by the petitioner company to decide to proceed against the petitioner following the law.
The provisional attachment order dated 26.7.2021 invoking powers under section 83 of the Central Goods and Services Tax Act, 2017 was passed against the petitioner. While the said first petition is still pending, an interim order dated 4.5.2022 was passed by the court.
Section 83 of the Act, deals with the provisional attachment to protect the interest of revenue in certain cases, in its sub-section (2) provides that every such provisional attachment ceases to have its effect after the expiry of the period of one year from the date of the order made under subsection (1). The registration of the petitioner under the GST Act has been cancelled based on the allegation made.
It was stated that the petitioner has filed an appeal against the order of cancellation of registration before the competent appellate authority and he was ready and willing to pay up the admitted liability of tax amount as reflected on the portal of the authorities to be discharged by the petitioner.
A two-judge bench comprising Justice N V Anjaria and Justice Devan M Desai directed the authorities to complete the adjudication proceedings within six weeks. Further directed the competent GST authorities to proceed to adjudicate the show cause notice after giving reasonable opportunity to the petitioner including filing a reply to defend its case, within a time-bound period.
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