Lawstreet Journal

Serious Allegations Of Availing Fraudulent GST ITC In Electronic Credit Ledger: Madras High Court Refuses Refund Of Amount

Lawstreet Journal 29 Mar 2022 8:04pm

Image courtesy: Lawstreet Journal Judiciary Serious Allegations Of Availing Fraudulent GST ITC In Electronic Credit Ledger: Madras High Court Refuses Refund Of Amount

The Madras High Court bench of Justice C. Saravanan refused to grant a refund of the amount lying in the assessee's electronic cash ledger on the grounds that there were serious allegations against the assessee for having an availed fraudulent input tax credit (ITC) in the electronic credit ledger on the strength of a bogus and fictitious input tax invoice for discharging GST liability with no supply.

The writ petitioner/assessee has sought the direction to refund Rs.88,17,754 lying in the petitioner's electronic ledger under Chapter IX of the CGST Rules, 2017. The electronic ledger of the petitioner has been frozen, and the petitioner was unable to use the amount.

The issue raised was whether the petitioner could seek a mandamus for a refund of amounts lying in the petitioner's electronic cash ledger.

The respondent had issued a summons to the petitioner's proprietor, Sheik Dawood. The proprietor was arrested and remanded in judicial custody. Statements were obtained from the proprietor of the petitioner and, during interrogation, a letter was extracted from the petitioner's proprietor in which the petitioner requested one of the customers, namely, Nobal Tech Industries Pvt. Ltd., to remit amounts due to the petitioner as outstanding to be directly paid into the petitioner's GSTN Account.

Counsel for the petitioner contended that the letter was obtained under coercion and that the amounts that were lying in the electronic ledger of the petitioner had hampered the day-to-day business of the petitioner inasmuch as it had resulted in a liquidity crunch and the petitioner was… Continue Reading...


Tagged: GST   Madras High Court  
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