HC affirms decision for blocking ITC of Firm making fake transactions by way of generating e-way bills

The Kerala High Court, in the matter of SHINE ABRAHAM Vs. THE STATE TAX OFFICER, has issued an order to block the ITC of Firms making fake transactions by way of generating e-way bills.

Key Points of the Judgment:

The present writ petition has been filed seeking quashing of the communication in Exhibit P-3 whereby the decision for blocking the input tax credit of the petitioner for an amount of Rs. 16,00,000 has been communicated to the petitioner.

According to the petitioner, the petitioner had received supplies from Mr. Shine Abraham, M/s. Evershine Agro Spices, First Floor, Golden Plaza, 7/415-K8, Angamaly – 683 572 with GSTIN 32AZJPA1985A1ZW. The invoice number of fake GSTIN registration have been taken by people for considering the input tax credit through fake invoices.

From the enquiry conducted by the Enforcement Department, it was found that the said address had a shutter room and the same was closed for a long period. Attempts to find out the owner of the shop had failed. After finding that the shop was closed for a long period on the basis of the proofs collected and in the presence of two undersigned independent witnesses, Scene Mahazar was prepared in respect of the shop on 08.06.2023.

It was also noticed that the said firm was making fictitious transactions by way of generating e-way bills. The firm mentioned above has settled its tax liabilities ITC utilisation.

Considering these facts that on the basis of fake invoices the petitioner had raised the claim for input tax credit on the supplies allegedly received on the basis of the fake invoices, the communication in Exhibit P-3 has been issued. Decision to block input tax credit is an administrative decision. No substance was found in this writ petition. The reason for blocking the input tax credit is the fake invoice and fake address of the firm from whom the petitioner had allegedly received the supply. Thus this writ petition is dismissed. The petitioner may avail to any other remedy as may be available to him under the law.

For the Official Judgment Download the PDF Given Below: