Wrongful Availment of ITC Upon fake document Corroboarted with statement of  Directors of Company: Calcutta HC Directs to File Appeal u/s 107 of CGST Act [Read Order]

In a recent case, the Calcutta High Court  has directed to file appeal under section 107 of the Central Goods and Service Tax (CGST) Act, 2017 against the wrongful availment of Input Tax credit ( ITC )  upon fake document corroborated with statement of  directors of company.

Forging India Iron and Steel Limited , the petitioner is aggrieved by certain portions of the order and the department is aggrieved by the entire order by which the writ court has permitted cross-examination of one Niraj Kumar Nathani.

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The stand taken by the department is that the statement of Niraj Kumar Nathani is only a corroborative statement but there are other abandoned material including the statement of the directors of the appellant/company which clearly shows that the ITC availed was ineligible and based upon fake documents, If such is the position, the department can very well proceed with the matter de hors the statement of Niraj Kumar Nathani.

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The bench found that the stand taken by the department is that the  writ court ought to have held that the statement of Niraj Kumar Nathani is nothing but a corroborative one apart from other evidences including the said investigation and inspection report issued by the Bureau of Investigation, Government of West Bengal, Commercial Taxes as well as from the other documentary evidence relied upon by the adjudicating authority in the order-in-original dated 30.10.2024.

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A division bench of Chief Justice , T. S. Sivagnanam and  Justice Chaitali Chatterjee (Das) viewed that the said statement need not be referred to in the event the assessee files a statutory appeal before the appellate authority. Necessarily, the assessee has to be relegated to file an appeal before the appellate authority, namely, the Commissioner (Appeal) CGST & Central Excise Appeal-II Commissionerate, Kolkata.

In the light of the above, the court set aside the order impugned and the direction to the assessee to prefer an appeal before the appellate authority in terms of Section 107(1) of the CGST Act, 2017 and the appellate authority shall decide the appeal petition without reference to the statement recorded of Niraj Kumar Nathani, apart from that the appellate authority shall adjudicate all other issues and pass a reasoned order on merits and in accordance with law after affording an opportunity of personal hearing to the parties.

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In the light of the fact that the time for preferring the appeal has already expired, the bench directed the assessee to file the appeal within 45 days from the date of receipt of server copy of this order and the assessee shall comply with the pre-deposit condition. The assessee shall be permitted to file the appeal manually as the online filing may not be possible as appeal is belated.

To Read the full text of the Order CLICK HERE

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