GADT/CnG/ADT/GST/2060/2020-Gr 2-CGST-ADT CIR-3-ADT-RAIPUR

I/643900/2022

भारत सरकार Government of India,

व त मं ालय, राज व वभाग, Ministry of Finance,
Department of Revenue,
क यव तु एवं सेवाकर तथा
Central GST & C. Excise,
उ पादशु क, Audit Commissionerate,
लेखा पर ा, आयु तालय, Audit Group-2,
ऑ डट ुप 2-,सकल-III रायपुर (छ॰ग॰)
Circle-III, Raipur (C.G.)

Room No. 206, C/D Block, G.S.T. Bhawan, Dhamtari Road, Tikrapara, Raipur (C.G.)- PIN -
492001
क . 206, C/D लॉक, जी. एस. ट भवन, धमतर रोड, टकरापारा, रायपुर (छ.ग) - 492001
F.No.GADT/CnG/ADT/GST/2060/2020-GR-2-CGST-ADT-CIR-3-ADT-RAIPUR/
Dated:

DIN 2 0 2 2 0 6 6 9 U P 0 0 0 0 3 1 8 2 6 9
T o ,

M/s. Ayush Kingrani,

Shop No.B-9, Sardar Vallabh Bahi Patel,
Wholesale Market, Dhumartarai,
Raipur (C.G.) PIN – 492 001
SHOW CAUSE NOTICE

M/s. Ayush Kingrani (Prop.), Shop No.B-9, Sardar Vallabh Bhai Patel,
Wholesale Market, Dhumartarai, Raipur, having GSTIN No.22DNDPK5448F2Z5
(hereinafter referred to as ‘the Noticee’) is engaged in trading of OTHER
MANUFACTURED TOBACCO AND MANUFACTURED TOBACCO SUBSTITUTES;
HOMOGENISED OR RECONSTITUTED TOBACCO; TOBACCO EXTRACTS AND
ESSENCES - Smoking tobacco, whether or not containing tobacco substitute in
any proportion; FOOD PREPARATIONS NOT ELSEWHERE SPECIFIED, NUT
MEG. The Noticee are liable for payments of GST on outward supplies of the
said under Section-9(1) of the Central Goods and Services Act,2017 (in short
CGST Act, 2017) as well as on the inward supplies of goods/services received
under Section9(3)/9(4) of the CGST Act, 2017. They are also availing Input Tax
Credit (ITC) on goods and services under Section-16 of the CGST Act, 2017.

2. The audit of the books of accounts of the Noticee has been conducted for
the period July,2017 to March,2019 by the officers of the CGST and Central
Tax, Audit Commissionerate Raipur. The Noticee was informed vide letter
F.No.GADT/CnG/ADT/GST/2060/2020-GR-2-CGST-ADT-CIR-3-ADT-RAIPUR/
dated 06.07.2021 (Annexure A) of discrepancy noticed during verification of
their Books of Accounts; the statutory return viz. GSTR-2A and GSTR-3B and
other relevant documents and asked them to pay an amount equivalent to the
wrong availment of Input Tax Credit (ITC) of Rs.52,70,114/- [CGST
Rs.3,51,312/- plus SGST Rs.3,51,312/- plus IGST Rs.23,209/- and Cess Rs.
45,44,280/-) during the period July,2017 to March,2019 along with interest as
conveyed to them vide said letter dated 06.07.2021. Details of which are
discussed hereinbelow. On finalization of audit, the said issue under the
aforementioned letter dated 06.07.2021 formed part of FAR
No.334/GST/2020-21 dated.20.05.2022 (Annexure B) under Para No.5 as
discussed below.

3. Rule 16(2) of the CGST Rules 2017 provides as under-

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(2) Input tax credit shall be availed by a registered person only if all the
applicable particulars as specified in the provisions of Chapter VI are contained in
the said document, and the relevant information, as contained in the said
document, is furnished in FORM GSTR-2 by such person.

As per Rule 36(2) of the Central Goods and Services Rules, 2017, (in
short CGST Rules, 2017) Input tax credit shall be availed by a registered person
only if all the applicable particulars as specified in the provisions of Chapter VI
are contained in the said document, and the relevant information, as contained
in the said document, is furnished in FORM GSTR-2 by such person.

3.1 Further, as per sub-section (1) of section 37 of the Central Goods and
Services Act, 2017 read with sub-rule (3) of Rule 59 of the CGST Rules,2017,
the details furnished in FORM GSTR-1 by the suppliers are made available
electronically to the registered person in FORM GSTR-2A after the due date for
filing of FORM GSTR-1. FROM GSTR-2A is auto populated and is a read-only
document containing a record of all the invoices issued by various suppliers of
the Noticee and is made available to the recipient electronically. On the basis of
the details contained in FORM GSTR-2A, the recipient shall prepare and furnish
the details of inward supply accordingly.

3.2 Further, Section 42(1) of the Act read as under-

“(1) The details of every inward supply furnished by a registered person

(hereafter in this section referred to as the “recipient”) for a tax period shall, in
such manner and within such time as may be prescribed, be matched––
(a) with the corresponding details of outward supply furnished by the
corresponding registered person (hereafter in this section referred to as the
“supplier”) in his valid return for the same tax period or any preceding tax period;
(b) with the integrated goods and services tax paid under section 3 of the
Customs Tariff Act, 1975 in respect of goods imported by him; and
(c) for duplication of claims of input tax credit.”

3.3 It is therefore mandatory for availment of Input Tax Credit that apart
from the required documents, the same should also be reflected in GSTR-2A
also. It may be pointed out here that during the relevant period, the Return
GSTR-2 has been deferred and in its place, GSTR-2A is prescribed, which is an
auto-generated read-only document, entries of which are based on returns filed
by the suppliers. Absence of an invoice in GSTR-2A means that the supplier has
not included that invoice in his return, which in turn means that he has either
not supplied the goods or not paid the tax on such supply. In such
circumstances, the Input Tax Credit is not admissible to the recipient under the
provisions of Section 16 of the CGST Act, 2017.

4 During the course of the GST Audit and verification of Input Tax Credit
available as per GSTR 2A, Annual Return GSTR 9 and Tax liability and Input
Tax Credit Statement, made available for the Financial Year 2017-18 & 2018-
19, it was observed that the Noticee has availed excess Input Tax Credit in
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GSTR-3B as compared to Input Tax Credit available as per GSTR-2A as

mentioned in Tax Liability and Input Tax Credit Statement Summary, as
detailed below:-

Excess availment of ITC in respect of transactions not reflected in GSTR – 2A

2017-18
(As per GSTR 9 – Table 8) ITC Involved in Rs.
Sl. No. Particulars CGST SGST IGST Cess Total
1 ITC as per GSTR 2A 2158808.17 2158808.17 203169.64 9851250.94 14372036.92
ITC as per the amended 2A
2 2158808.17 2158808.17 203169.64 9851250.94 14372036.92
Summery
3 ITC as per GSTR 3B 2563174.77 2563174.77 203169.64 13747393.69 19076912.87
ITC Reversed As per Col. 7(I)
4 0 0 0 0 0
of 9
ITC available but ineligible
5 0 0 0 0 0
Col.8(F)
6 DIFF. (2-3-4-5) -404366.6 -404366.6 0 -3896142.75 -4704876
2018-19
(As per GSTR 9 – Table 8)
7 ITC as per GSTR 2A 3049787.80 3049787.80 779826.70 13030532.95 19909935.25
ITC as per the amended 2A
8 3099208.86 3099208.86 779826.70 13288087.88 20266332.30
Summery
9 ITC as per GSTR 3B 3043356.00 3043356.00 802426.00 13529032.00 20418170.00
ITC Reversed As per Col. 7(I)
10 0.00 0.00 0.00 399709.00 399709.00
of 9
ITC available but ineligible
11 2798.71 2798.71 610.12 7484.10 13691.64
Col.8(F)
12 DIFF. (8-9-10-11) 53054.15 53054.15 -23209.42 -648137.22 -565238.34
Total (both years) -351312.45 -351312.45 -23209.42 -4544279.97 -5270114.29

5. The aforesaid details were obtained from the portal of Noticee provided by
the Noticee and the same was provided to the Noticee, requesting them to clarify
the said difference, but the Noticee failed to clarify the said differences. In view
of the above, the Noticee has wrongly availed the ITC for the F.Y.2017-18 &
2018-19 amounting to Rs.52,70,114/- (CGST of Rs.3,51,312/- (+) SGST of
Rs.3,51,312/-, (+) IGST of Rs.23,209/- and Cess of Rs.45,44,280/- which was
recoverable along with interest and penalty in terms of CGST/CG-GST Act,
2017 read with Section-20 of IGST Act, 2017.

6. Accordingly, the Noticee was, asked vide letter dated 06.07.2021

(Annexure A) to pay the ITC of GST amounting to Rs.52,70,114/- (CGST of
Rs.3,51,312/-, SGST Rs.3,51,312/- + IGST 23209/- and Cess Rs.45,44,280/-)
wrongly availed during the Financial Year 2017-18 and 2018-19 along with
interest.

6.1 In response to this office letter dated 06.07.2021, the Noticee vide their
letter dated 03.08.2021 (Annexure C) submitted reply in which they referred
Rule-16 and stated that they have complied with provisions of law and availed
correct credit. They also cited cases/judgments in their favor.

7. It appears that the Noticee has wrongly availed the Input Tax Credit for
the F.Y 2017-18 & 2018-19 amounting to Rs.52,70,114/- as mentioned in para
above. Had the department not audited the records of the Noticee, the Noticee
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would have succeeded in availment of said Input Tax Credit. The Noticee has
suppressed the material facts from the Department as they have failed to
disclose the correct amount of ITC available to them in their GSTR-3B returns.
This appears to be a deliberate and willful act of suppression with the intention
to avail wrong ITC and utilizing the same for payment of output tax liability.
Therefore, the same appears recoverable from them under Section-74(1) of the
CGST/CG-GST Act,2017 and relevant Act of IGST along with interest under
Section-50 of the CGST/CG-GST Act,2017 and penalty under Section-74(1)
supra. The Noticee has contravened the provisions of Sections-16, 37, 42 and
59 of CGST Act, 2017 read with Rules-36, 37 and 59 of CGST Rules, 2017, and
Section-8 of the Goods and Services tax (Compensation to States) Act, 2017 ,
which appears recoverable from them under Section-74(1) of the CGST
Act,2017 along with interest under Section-50 of the CGST Act,2017.
Contravention of the above Sections are offences as defined under Section-
122(2)(b) of the CGST Act,2017 and accordingly, they also appear to have
rendered themselves liable to penalty under Section-122(2)(b) of the CGST Act,
2017. They simultaneously have contravened the corresponding provision of the
State GST Act,2017 and Rules made there under and all action proposed
against them are also simultaneously initiated under the corresponding
provision of the State GST Act,2017.

8. The Noticee M/s. Ayush Kingrani (Prop.) are now, therefore, called upon
to show cause to the Deputy/Assistant Commissioner, Central GST & Central
Excise, Division-III, Central Goods & Service Tax, Bhawan Civil Lines, Raipur,
as to why:-

i. Input Tax Credit of Goods and Service Tax amounting to

Rs.52,70,114/- (CGST of Rs.3,51,312/- (+) SGST Rs.3,51,312/- (+) IGST of
Rs.23,209/- and Cess of Rs.45,44,280/-) for the F.Y 2017-18 & 2018-19
[Rs. Fifty Two Lakh Seventy Thousand One Hundred and Fourteen Only]
should not be disallowed and recovered from them under the provisions of
Section-74(1) of the Central Goods & Services Tax Act, 2017.
ii. Interest on the amount of Input Tax Credit as mentioned in 9(i)
above should not be charged and recovered from them from the relevant
date as per the rate prescribed under Section-50 of Central Goods and
Services Tax Act,2017.

iii. Penalty should not be imposed upon them under Section 74(1) read with
Section-122(2)(b) of CGST Act,2017 for availing of in-eligible input tax credits
(ITC) with intent to evade payment of Goods and Service tax (GST) for
contravention of legal provisions as discussed above.

9. Wherever the provisions of the Sections of CGST Act and Rules made
there under have been invoked, they may be read with corresponding
Section and Rules of State GST Act and Rules respectively in accordance
with the power conferred upon the Central Tax officer under Section 6
of the CGST Act.
10. The Noticee at the time of showing cause should produce all the evidences
upon which they intend to rely in support of its defence. The Noticee
should also clearly mention in their written reply as to whether they wish
to be heard in person.
11. If no cause is shown against the action proposed, to be taken within 30
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days of receipt of this notice or if they do not appear before the said
adjudicating authority when the case is posted for hearing, the case will
be decided, ex-parte, on the basis of evidence(s) available on record.
12. This notice is issued without prejudice to any other action that may be
taken under the provisions of any other law for the time being in force as
provided under CGST/ SGST Act, 2017 or/ and the Rules made there
under.
13. Following documents are relied upon which all are already available with
the Noticee.

a. Letter dated 06.07.2021. [Annexure-A].

b. Final audit Report No.334/GST/2020-21 dated 20.05.2022 [Annexure-B].
c. Noticee’s letter dated 06.07.2021, the Noticee vide their letter dated
03.08.2021 (Annexure-C).

( P. N. Mishra )
Assistant Commissioner (Audit)

Copy To:-

1. The Deputy/Assistant Commissioner, Central GST & Central Excise,

Division-III, Raipur (Central Goods & Service Tax Building, Tikrapara,
Raipur) along with copies of relied upon documents for adjudication,
please.
2. The Superintendent, (Tech), Audit Commissionerate Raipur (Central
Goods & Service Tax Building, Tikrapara Raipur) for information, please.
3. Guard file, Audit Commissionerate, Raipur.

( P. N. Mishra )
Assistant Commissioner (Audit)