Petitioner can’t be held liable for contravention of provision of GST law by any other person in supply chain: HC

Case Details: Shiv Enterprises v. State of Punjab - [2022] 135 taxmann.com 123 (Punjab & Haryana)

Judiciary and Counsel Details

• • Ajay Tewari and Pankaj Jain, JJ.
  • Sandeep Goyal, Adv. for the Petitioner. 
  • Ms. Sudeepti Sharma for the Respondent.

Facts of the Case

The proceeding under Section 130(1) was initiated against the petitioner on the ground that sellers/suppliers of the petitioner were not having inward supply but only engaged in outward supply without paying any tax. It challenged the proceedings and filed petition against the same.

High Court Held

The Honorable High Court observed that no discrepancy has been pointed out in invoice and e-way bill of the petitioner and no finding was there with respect to contravention of any provision by petitioner with intent to evade payment of tax. The department alleged contravention of provisions of GST against supplier of petitioner on the ground of showing outward supply without having inward supply. The invocation of Section 130 must have nexus with action of person against whom proceedings would be initiated. Therefore, it was held that petitioner cannot be held liable for contravention of provision of law by any other person in supply chain and notice issued under Section 130 and order passed by authorities was liable to be set aside.