No blockage of ITC on default of supplier: M/s LGW Industries Limited
Case Covered:
2. Bharat Gupta, son of Abhay Kumar Gupta, Managing Director and Shareholder having his office at Sector V, Salt Lake City, Saltlake, Kolkata East, North 24 Parganas. North 24 Parganas, Kolkata – 700091.
…Petitioners
Versus
Union of India,
Facts of the case:
In this case, section 16(2) (c) of the CGST Act is challenged. In this section, the ITC of a recipient is subject to the payment of tax by the supplier.
Related Topic:
Intermediary service in GST with relevant cases
Download copy of the order
The brief facts leading to the filing of the present Petition are stated as under:-
2.1 The Petitioner no. 1 is a company incorporated under the Companies Act, 1956 having its registered office at Tower-1, 1803, G-2, Block-GP, P S Srijan Corporate Park, Sector-V, Salt Lake City, Kolkata, North 24 Parganas.
2.2 The Petitioner no. 2 is a citizen of India and shareholder and director of the Petitioner no. 1 company. In the instant case, by reasons of the wrongful and illegal actions of the Respondents, the rights of the Petitioner No. 2 to carry on business and/or hold property through the agency and/or instrumentality of the Petitioner No. 1 Company, has been seriously prejudiced and adversely affected.
2.3 The Petitioners state that the cause of action in the instant case has arisen within the territorial jurisdiction of this Hon’ble Court.
2.4 The Petitioners state that Petitioner No. 1 Company is registered under the CGST Act and WBGST Act, vide registration bearing no. 19AAACL4610L1ZH.
2.5 The Petitioner No. 1 is merchant exporter of jewellery, footwear, cosmetics, engineering goods etc.
The Petitioners state that petitioner no. 1 received a notice vide memo no. 1021CT/11U dated 28.08.19 for producing legally acceptable documents to explain as to why the ITC amounting to Rs. 1,17,83,716.62 along with the interest payable u/s 50 the GST Acts, 2017 at the rate of 24% and a penalty equivalent to the tax as specified should not be reversed/paid by it. It was alleged in the notice that petitioner no 1 has claimed inward supply of goods from several Registered Taxable Persons ( hereinafter referred to as RTPs) and availed the ITC thereon during the period August, 2017 to March, 2018. It was further alleged that the above mentioned RTPs have obtained registration under the GST Act, 2017 using bank accounts which were opened by using different combinations of the names of five persons with fake identity proofs (Fabricated Copy Driving Licenses). The suppliers were not found at their registered place and on the basis of that deptt tried to restrict their input tax credit.
The matter is listed for further hearing.
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