GST
TRT-2025-
High court of Allahabad
Date:-01-09-25
In:-
Issue Favourable to Tax Payer ?:-
Order date: 01 Sep 2025
Parties: M/s Subhash Chand & Co. v. State of U.P. & Ors.
Facts -
- Petitioner sold sugar in Dec 2018 to M/s Shiv Trading Co., Delhi (valid GSTIN). Department alleged petitioner had taken inward supply from Shiv Trading, which was later found non-existent.
- Proceedings under Section 73 resulted in tax + equal penalty order dated 15.02.2020, later upheld in appeal on 22.07.2021. Petitioner consistently argued it was a seller, not purchaser, producing invoices, e-way bills, and bank records to show outward supply.
Issue -
- Whether tax and penalty under Section 73 can be sustained when the transaction was an outward supply duly recorded, and not an inward supply as alleged by the authorities?
Order -
- The single bench of the Hon’ble High Court noted clear documentary evidence (invoices, e-way bills, banking proofs) establishing outward supply by petitioner, with tax duly deposited.
- Authorities failed to verify records and instead wrongly presumed an inward purchase from a non-existent firm; this error went uncorrected in appeal.
- Imposition of equal penalty under Section 73 was contrary to statute, since penalty under Section 73 is limited to 10% and applies only where short payment is admitted. The impugned orders dated 15.02.2020 and 22.07.2021 were quashed, writ petitions allowed.
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