<w0>El ITC sobre suministros recibidos de empresas inexistentes y ficticias constituye un fraude contra el departamento y el erario público.</w0>

Summary:

The Petitioner was engaged in manufacturing and sale of Aluminum Casting and Machinery Parts. The petitioner claimed ITC on inward supplies received from the supplier. During the conduct of the survey at the location of the supplier, it was found that the suppliers were non-existent and bogus firms. Therefore, corresponding ITC was disallowed to the petitioner and corresponding demand was raised alongwith interest and Penalty.

The petitioner produced all the documents pertaining to inward supplies such as Invoice, GRs, e-waybill, Ledger, Bank statement etc. The petitioner contended that he had actually received the inward supplies. The supplier firms were having valid GSTIN registrations at the time of transaction. If GSTIN registration of the firm is cancelled subsequently, the petitioner cannot be penalized for the same. Further, all the requirements of Section 16 are duly complied with for the purpose of claiming ITC.

Hon’ble High Court held that as per Section 16(2), no registered person shall be entitled to any ITC unless he has received the goods.  "Received the goods means the person claiming the ITC must have actually received the goods". Transaction existed only on papers, i.e., no inward supply is received, will not be entitled to the ITC. Further, If ITC is allowed to a person on the ground that the supplier was registered under GST, that would not create any estoppel against the authority taking appropriate action for claiming refund of the benefit wrongly availed on the ground of receiving inward supplies from non-existent firms. Therefore, there is no illegality in the impugned orders.

1. Resumen de los hechos del caso

• M/s Rajshi Processors Raebareli (“The Petitioner”) is engaged in manufacturing and sale of Aluminum Casting & Machinery Parts. 
• The petitioner Filed the GST return for May, 2019, August, 2019 and December, 2019.
• During the conduct of a survey at the place of the petitioner, the Special Investigation Branch (“SIB”), Commercial Tax found that the petitioner claimed to have received inward supplies from various supplies and claimed the corresponding ITC.
• When the survey was conducted on the place of suppliers, such suppliers were found to be non-existent and bogus firms. Besides the place of business declared, no other godown or Branch was found to be in existence of such suppliers.
• During enquiry it was found that the petitioner has knowingly claimed an excessive amount of ITC and had adjusted the same against the tax payable.
• The petitioner submitted his explanation alongwith the evidence, stating that it had received inward supplies. In support of its claim, the petitioner submitted invoices, copies of GR (goods receipts), e-way bill, ledger and bank statements of the firms etc. The inward supplies received by the petitioner are recorded in the stock register as well.
• The adjudicating authority did not accept the explanation of the petitioner and held that the tax invoices were issued without any actual supply of goods. 
• Accordingly, benefit of ITC was declined to the petitioner and a penalty was imposed on the petitioner alongwith interest.
• The petitioner filed an appeal against the impugned order.

2. Decision by Hon’ble Appellate Authority

The appellate authority found that:

1. The format of GR numbers produced by the petitioner was different even though all of those GRs were issued by the same transport company and it had no other branch.
2. Further, GST number was also mentioned on the transport builty. However, the GSTIN was found to be not valid as per the information available on the GST portal. 
3. Further, the contact number mentioned on the builty was also in use by some other person.
4. Therefore, it appears that the Bilties are attached to show the real inward supply by making adjustments. 
5. The Bilties had been produced merely to establish transactions with non-existing firms. No goods were transported from Agra to Raebareli and the transactions were paper transactions only.
6. Therefore, The appellate Authority held that there was no reason for making any interference in the order passed by the adjudicating authority.

3. Relevant Legal Extract

Relevant extract of the CGST Act is reiterated below for ready reference:

"16(2) Notwithstanding anything contained in this section, no registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both to him unless,--

…

(b) he has received the goods or services or both.

[Explanation.--For the purposes of this clause, it shall be deemed that the registered person has received the goods or, as the case may be services-

(i) where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise; (ii) where the services are provided by the supplier to any person on the direction of and on account of such registered person.]

…”

4. Contention of the petitioner before Hon’ble High Court

The petitioner contended that:

1. Subsequent cancellation of GST registration of the supplier

• The petitioner had actually received inward supplies and the same is established from the records produced before the adjudicating authority as well. 
• The supplier firms were having valid GSTIN registrations when the petitioner received the supplies. If GSTIN registration of the firm is cancelled subsequently, the petitioner cannot be penalized for the same. 
• Also, GST registrations of the suppliers were cancelled on their own applications.

2. Conditions for claiming Input Tax Credit

• For the purpose of claiming ITC, the petitioner was merely required to be in possession of a tax invoice or debit note issued by the supplier, receipt of goods and actual payment of tax to the Government. 
• All the requirements of Section 16 of CGST Act, 2017 has been fulfilled by the petitioner.
• Further, The documents required for claiming benefit of ITC, as mentioned in Rule 36 of GST Rules 2017, had been furnished by the petitioner.

3. Judgment of Delhi High Court passed in W.P.(C) 6093/2017 (On Quest Merchandising India Pvt. Ltd. Vs. government of NCT of Delhi & Others)

wherein the Delhi High Court held as under:

• La legislación del GST no ha logrado diferenciar entre los comerciantes compradores que han realizado transacciones de buena fe con el vendedor, tomando todas las precauciones, y aquellos que no lo han hecho.
• El crédito fiscal (ITC) debería restringirse a aquellos vendedores que no depositaron el impuesto recaudado, sin castigar a los compradores de buena fe.
• En el presente caso, la pretensión del comprador no es que se le conceda el ITC al margen de las condiciones establecidas.
• El comprador ha cumplido con las condiciones exigidas por la Ley DVAT para la reclamación del ITC y, por tanto, este no puede denegarse solo porque el vendedor haya incumplido las condiciones de dicha ley.

5. Contention of the Respondent

El recurrido alegó lo siguiente:

• Este no es un caso en el que se haya denegado el beneficio del ITC simplemente porque el registro de las empresas proveedoras fuera cancelado posteriormente.
• Por el contrario, las órdenes se han dictado debido a que el contribuyente presentó suministros internos falsos provenientes de empresas inexistentes y ficticias.
• Por lo tanto, ha reclamado el ITC de forma fraudulenta sin haber recibido suministros reales.

6. Análisis del Honorable Tribunal Superior

El Tribunal Superior realizó el siguiente análisis y determinaciones:

a. Bienes no recibidos realmente

• Las condiciones relacionadas con la reclamación del ITC se establecen en la Sección 16 de la Ley del GST. Además, según la Sección 16(2), ninguna persona registrada tendrá derecho a ningún ITC respecto a cualquier suministro de bienes a menos que los haya recibido.
• "Recibir los bienes" significa que quien reclama el ITC debe haber recibido físicamente los productos. Cuando una persona solo presenta documentos sobre la recepción de bienes, pero no los ha recibido realmente y se establece que la transacción fue meramente documental, sin suministro real, no tendrá derecho al beneficio del ITC conforme a la Sección 16(2)(b) de la Ley del GST de 2017.
• En este caso, el peticionario cumplió con los requisitos formales y, por ello, el ITC fue reclamado y concedido. Sin embargo, tras una investigación, se descubrió que las empresas proveedoras eran inexistentes y ficticias.
• No se encontraron las empresas en las direcciones declaradas ni se halló almacén o local alguno de dichas firmas. Parece que las empresas solo existían sobre el papel.

b. Cancelación posterior del registro de GST

• Aunque el registro de las empresas existía cuando el peticionario alegó haber obtenido los suministros, la investigación reveló que la empresa en sí no existe.
• Una empresa inexistente no puede realizar un suministro real.
• El hecho de que el proveedor estuviera registrado en el GST en la fecha de la transacción no obliga al departamento a otorgar el beneficio del ITC al peticionario, sabiendo que la empresa proveedora era inexistente y no pudo haber realizado suministros reales.
• Reclamar el ITC por tales suministros equivale a cometer un fraude contra el departamento y el erario público.

c. Es un principio jurídico consolidado que el fraude vicia incluso los procedimientos más solemnes. Aunque se hubiera permitido el ITC al peticionario basándose en que el proveedor estaba registrado en el GST, esto no crearía impedimento alguno para que la autoridad tome las medidas pertinentes para reclamar el reembolso del beneficio obtenido indebidamente al alegar la recepción de suministros de empresas inexistentes.

d. La alegación de que los suministros se recibieron de empresas inexistentes se ve respaldada por el hecho de que las guías de remisión (GR) emitidas por los transportistas presentaban formatos distintos. Se descubrió que el GSTIN mencionado en las cartas de porte no era válido. Asimismo, el número de contacto indicado en dichas cartas no pertenecía a ninguna empresa de transporte, sino que era utilizado por otra persona.

e. Estas conclusiones corroboran la orden dictada por la autoridad adjudicadora contra el peticionario. La autoridad de apelación ha emitido la orden impugnada tras considerar los hechos, las circunstancias del caso y el material disponible en el expediente.

7. Orden

El Honorable Tribunal Superior de Allahabad determinó que no existe ilegalidad alguna en las órdenes impugnadas.