KIRAN ENTERPRISE Vs. STATE OF TRIPURA

JUDGEMENT

(1.) By means of this petition filed under Article 226 of the Constitution of India, the petitioner, which is a sole proprietorship firm, has challenged fundamentally two orders being the order dtd. 15/11/2018 [Annnexure-4 to the writ petition] and the decision contained in the communication dtd. 17/12/2019 [Annexure-6 to the writ petition]. In addition, it has been urged by the petitioner that the defects/errors manifest in the show-cause notice dtd. 10/10/2018 [Annexure-2 to the writ petition] render the same unsustainable. The petitioner is the distributer of Airtel as engaged by Bharati Hexacom Limited for Dharmanagar jurisdiction. This fact, however, is not under dispute. It is also not in dispute that in terms of Clause-5.7 of the agreement dtd. 30/10/2010 by which the petitioner has been engaged as the distributor, the petitioner is under obligation for making payment of all taxes, duties, levies, cess, search charge or any other charges that may be applicable on the distributor or for prepaid/service offerings/ products etc. According to the petitioner, the tax invoices used to be prepared by Bharati Hexacom Limited in the name of M/s New Kiran Enterprise, another proprietorship firm owned by the petitioner. On 4/9/2012, when a search was carried out under Sec. 67(2) of Tripura State Goods and Services Act, 2017 [TSGST Act, 2017 in short] it revealed from GSTTR-3B for the period from July, 2017 to 31/3/2018 that the taxpayer namely M/s Kiran Enterprise GSTTIN 16ACIPD2157R2Z9 Nayapara Road Dharmanagar has utilized or availed IGST at Rs.3,690.00, CGST at Rs.12,67,409.84 and SGST at Rs.12,67,409.84 but as per Form GSTR- 2A (inward supply), the taxpayer is entitled for utilization Input Tax Credit (ITC) against its liabilities at Rs.2,67,307.94 as CGST and Rs.2,67,307.94 as SGST only, but the tax payer had been found to have wrongly utilized excess ITC at Rs.3,690.00 as IGST, Rs.10,00,101.90 (Rs.12,67,409.84Rs.2,67,307.94) as CGST and Rs.10,00,101.90 (Rs.12,67,409.84Rs.2,67,307.94) as SGST.

(2.) By the order of seizure dtd. 4/9/2018 tax invoices were seized in presence of witnesses by the Superintendent of State Tax, Dharmanagar charge. For purpose of seizure, due authorization was issued by the competent authority under Sec. 67(1) of TSGST Act. At the time of seizure, one Ajit Kumar Deb, son of the proprietor was present. As it appeared that the petitioner has committed offence under Clauses-(c) and (d) of Sec. 12 (2) of TSGST Act, a notice under Sec. 74(1) of the TSGST Act was issued to the petitioner to show-cause as to why the amount of Rs.20,03,893.80 along with interest payable thereon and penalty equivalent to the tax as computed under Sec. 74(1) of the TSGST Act and why further penal action should not be taken under Clause (e) of Sec. 122(3) of TSGST Act for availing or utilizing wrongful Input Tax Credit (ITC) to the extent of Rs.20,03,893.80 (Rs.3690.00 +10,101.90 + Rs.10,101.90) by way of suppression of facts for evading tax and for having supplied taxable goods without issuance of tax invoices as required under Sec. 31(1) of the TSGST Act. The detailed break-up of such evasion has been shown in a table.

(3.) The sole proprietor by filing a reply has stated that she has two sole proprietorship firms namely M/s Kiran Enterprise and M/s New Kiran Enterprise which deal in the same products and their PAN number is also same. Only the GST number is separate. She has categorically made the following statement :