High Court seeks details in cases of bogus input tax credit claims

Saurabh Malik

Tribune News Service

Chandigarh, March 19

The Punjab and Haryana High Court today sought the details of action taken for registering FIRs against persons who allegedly registered bogus transport companies with the GST Department and issued fake invoices and “bilties” (waybills) in the name of such firms and forged waybills in the name of genuine ones.

The directions came after Justice Arun Kumar Tyagi made it clear that the mere arrest, detention, prosecution and punishment of offenders without recovering tax and penalty would not serve the purpose of saving the business and the national economy from the consequences of fraudulent claims of input tax credit.

Justice Tyagi fixed the case for further hearing in the second week of May after senior standing counsel Sourabh Goel sought time to file an additional reply.

The judge said the delay and inaction on the part of the agencies concerned in taking steps for the assessment of liability and realisation of the amount helped none, but the offenders. It enabled the offenders to not only intimidate the witnesses and tamper with or destroy the evidence, but also allowed them to transfer their properties to others to avoid the realisation of tax and penalty.

For underscoring the magnitude of the matter, Justice Tyagi referred to an answer given by the Union Finance Minister in the Lok Sabha. In 2018-19, 1,620 cases involving Rs 11,251.23 crore were registered by the Central GST alone for fake invoices involving fraudulent input tax credit.

Justice Tyagi sought an affidavit from the Additional Director General, Gurugram Zonal Unit, asking for information on steps taken for assessing tax liability and recovering dues from firms, which issued invoices, on the basis of which fraudulent claims of input tax credit were made.