GOVERNMENT OF INDIA

OFFICE OF THE SUPERINTENDENT, RANGE-V, PARKSTREET DIVISION

KOLKATA SOUTH CGST & CX COMMISSIONERATE, KOLKATA, GST BHAWAN
180, SHANTIPALLY, RAJDANGA MAIN ROAD (3rd FLOOR), ROOM NO. 344, KOLKATA 700107
Order-in-Original No: 40/SUPTD/GST/ADJ/R-V/PSD/KOL-SOUTH/2024-25 Date: 12.12.2024

DIN- 20241261WB000000FA14

PASSED BY SRI GOPAL PAUL,

SUPERINTENDENT OF CENTRAL TAX, CGST & CX, RANGE-V,
PARK STREET DIVISION, KOLKATA SOUTH COMMISSIONERATE
ावना / PREAMBLE
1. यह आदेश, िजसके नाम पर जारी कया जाता है, उन के ि गत उपयोग के िलये िनःशु क दया जाता है |
This copy is granted free of charge for the private use of the person to whom it is issued.
2. य द कोई ि इस आदेश से िथत ह, तो वे क ीय व तु और सेवा कर अिधिनयम, 2017 क धारा 107 के तहत
अपर/संयु आयु (अपील-1), सीजीएसटी और सीए स, कोलकाता, को इस आदेश के िखलाफ, GSTAPL-1, जैसा
क क ीय व तु और सेवा कर िनयम, 2017 के िनयम 108 के तहत िनधा रत है, के इले ॉिनक प से, तथा हाड
कॉपी म तीन ितय , आदेश क एक ित के साथ अपील कर सकते है। इस अपील को इस आदेश के पा रत क तारीख
से 3 (तीन) महीन के भीतर दज कया जाना चािहए।
Any person aggrieved by this order may, under Section 107 of the Central Goods and
Services Tax Act, 2017, file an appeal against this order to the Additional/Joint Commissioner
(Appeals-1), CGST & CX, Kolkata, electronically, and also in hard copies in triplicate, in form
GST APL-1, as prescribed under Rule 108 of the Central Goods and Services Tax Rules, 2017,
along with a copy of order which is appeal against. Such appeal must be filed within 3
(three) months from the date of communication of such order to the person.
3. जब तक अपीलकता ने भुगतान नह कया है तब तक कोई अपील दायर नह क जाएगी: -
No appeal shall be filed unless the appellant has paid: -
क) पूण प से, आ ेिपत आदेश से उ प कर, याज, जुमाना, शु क और दंड क रािश का ऐसा भाग, जैसा क उसके
ारा वीकार कया गया है; तथा
a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the
impugned order, as is admitted by him; and
ख) उ आदेश से उ प िववाद म कर क शेष रािश के दस ितशत के बराबर रािश, अिधकतम प ीस करोड़ पये के
अधीन, िजसके संबंध म अपील दायर क गई है
b) a sum equal to ten percent of the remaining amount of tax in dispute arising from the said
order, subject to a maximum of twenty-five crore rupees, in relation to which the appeal
has been filed
4. जहां अपीलकता ने उपरो रािश का भुगतान कया है, शेष रािश के िलए वसूली क कायवाही क ई समझी जाएगी
Where the appellant has paid the above amounts, the recovery proceedings for the balance
amount shall be deemed to be stayed.
 Subject: - Adjudication of case proceedings initiated against that M/s. S.S
BOUTIQUE, having PPoB at Block IV, Room No.- 2D, Diamond Chamber, 4
Chowranghee Lane, Kolkata, West Bengal-700016, having GSTIN-
19AJCPR4788H1ZL, under Show Cause cum Demand Notice No.-
276/AE/CGST&CX/Kol-S/23 dated 04.08.2024 issued under C. No.
GEXCOM/AE/INV/GST/2524/2024-AE dated 04.08.2024 bearing DIN-
20240861WB000061666A.

1. The instant adjudication proceeding is being taken up in respect of Show Cause

Notice No.276/AE/CGST&CX/Kol-S/23 dated 04.08.2024 issued under C. No.
GEXCOM/AE /INV/GST/2524/2024-AE dated 04.08.2024 bearing DIN
20240861WB000061666A to M/s. S. S. BOUTIQUE, having PPoB at Block IV, Room
No.- 2D, Diamond Chamber, 4 Chowranghee Lane, Kolkata, West Bengal-700016,
having GSTIN- 19AJCPR4788H1ZL (hereinafter referred to as “the said
taxpayer/noticee”) and primarily engaged in trading business i.e., Women or Girls
suits, f a l l i n g under HSN 6204, 6307, 6211, 5210, 5515 as per the
registration portal of GST which are taxable supply. During the course of
investigation, it revealed that the above said taxpayer have contravened the
provisions of Section 16(2)(b) & Section 155 of the Central Goods and Service
Tax Act, 2017, as amended (hereinafter referred to as “CGST Act’17”) and West
Bengal Goods and Service Tax Act, 2017, as amended (hereinafter referred to as
“WBGST Act’17”) (hereinafter both the acts together referred to as ‘the said Acts’)
and have also contravened Rule 36 of the CGST Rules, 2017 and SGST Rules, 2017
(hereinafter both the rules together referred to as ‘the said Rules’) in as much as
the said taxpayer availed inadmissible Input Tax credit of ₹ 4,17,788/- (CGST of ₹
2,08,894/- + SGST of ₹2,08,894/-) during the F.Y. 2017-18 & 2018-19 on the basis
of the invoices issued by a non-existing entity M/s Auexia Traders (GSTIN:
19APGPB1744M1ZS) & utilised the same inadmissible ITC towards payment of GST
liabilities. Whereas the RTP also wilfully suppressed the material facts of availing &
utilizing of such ineligible / inadmissible ITC with the malafide intention to evade
payment of tax and thereby violated the provisions of Acts & Rules as above.
Therefore, the said ineligible / inadmissible ITC appears to be demandable and
recoverable from the said RTP in terms of Section 74(1) of the said Acts read with
Rule 142 of the said Rules along with appropriate interest in terms of Section 50
read with Section 74(1) of the said Acts and also the said RTP made themselves
liable for penal action under Section 74(1) of the said Act: –

2. BRIEF FACTS OF THE CASE

2.1 An investigation was carried out by the Directorate General of Goods & Services Tax
Intelligence, Kolkata Zonal Unit against M/s Auexia Traders, having Principal Place
of Business at 853, Nawabgabj, Ghose Para Road, Ichhapore, North 24 Pgs, Kolkata-
743144. On visiting the said premises statement of Sh. Tamojit Bose, Proprietor of
M/s Auxesia Traders was recorded, and Panchnama as well as a Statement was
drawn, wherein he inter-alia admitted that there was actually no real business
activity of M/s Auxesia Traders but only fake GST invoices were being issued in the
name of M/s Auxesia Traders to different business entities in order to pass fake
Input Tax Credit without supply of underlying goods or services.
2.2 An Alert Circular No. 11/2023-24 dated 18.03.2024 was issued by the Principal
Additional Director General, DGGI, Kolkata Zonal Unit, 4/2, karaya Road, Kolkata
700017 against M/s Auexia Traders. In the Alert circular, it was ascertained
without any doubt that M/s Auexia Traders issued invoices fraudulently only to
pass on illegal benefit of ITC to the recipient of fake invoices without any material
supply of goods. The registration of M/s Auexia Traders was cancelled Suo-Moto
with effect from 29.09.2020.

Page 2 of 8
 2.3 From the Alert Circular, it revealed that M/s Auexia Traders issued fake
invoices and passed on ITC to different entities all over India as per their GSTR-1
Returns available in the GST portal AIO. One such entity is the said taxpayer, who
received ITC of ₹ 4,17,788/- from M/s Auexia Traders against the invoices issued
without any actual receipt of Goods/Services. The GSTR-2A of the said taxpayer
was downloaded from the AIO system and it is noticed that there was credit of ITC
amounting to ₹ 4,17,788/- (CGST of ₹2,08,894/- + SGST of ₹2,08,894/-) in
reference from M/s Auexia Traders whose details are as below:
ITC received from M/s. Auxesia Trade
INVOICE NO. MONTH TAXABLE VALUE CGST@6% SGST@6%
AT/2017-18 & 2018-
151250 9075 9075
19/826
AT/2017-18 & 2018-
Feb-18 196000 11760 11760
19/874A
AT/2017-18 & 2018-
151200 9072 9072
19/915
AT/2017-18 & 2018-
176000 10560 10560
19//1006
AT/2017-18 & 2018-
220500 13230 13230
19//1030
March, 18
AT/2017-18 & 2018-
204000 12240 12240
19//1049
AT/2017-18 & 2018-
205000 12300 12300
19/977
AT/2018-19/159 263940 15836 15836
AT/2018-19/163 218440 13106 13106
AT/2018-19/179 155520 9331 9331
AT/2018-19/190 210180 12611 12611
AT/2018-19/205 May, 2018 189540 11372 11372
AT/2018-19/223 265680 15941 15941
AT/2018-19/227 274320 16459 16459
AT/2018-19/248 255360 15322 15322
AT/2018-19/258 344640 20678 20678
208894 208894

2.5 A letter vide office letter of even no. 5166 dated 05.06.2024 (DIN-
20240661WB0000999BF9) was issued to M/s. S.S BOUTIQUE asking them to
reverse the said inadmissible ITC of ₹ 4,17,788 /- received from non-trading entity
i.e. M/s. Auexia Traders. But no reply from the said noticee/taxpayer was received.
3. SUMMARY OF INVESTIGATION :
In view of the above, it was found that M/s S. S BOUTIQUE had contravened the
provisions of Section 16(2)(b) of the CGST Act and WBGST Act, 2017 stipulates and
had claimed inadmissible ITC of ₹ 4,17,788/- received from non-existent entity
which is recoverable from the above said taxpayer along with appropriate interest
and penalty.
4. CONTRAVENTION /VIOLATION OF STATUTORY PROVISIONS:
4.1. The essential condition for availing the ITC is that the goods should be received by
the availer or recipient of ITC. Para 2(b) of Section 16 of the CGST Act and WBGST
Act, 2017 stipulates:

(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,''
a) ..................................

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

Page 3 of 8
 [Explanation. 'For the purposes of this clause, it shall be deemed that the registered
person has received the goods or services 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.]

4.2 Further, as per the provision of Section 155 of the CGST Act and WBGST Act, 2017,
it is the responsibility of the recipient or availer of ITC, to prove that he is eligible to
avail ITC on a supply.
It is therefore clear that the said taxpayer has to prove his eligibility of ITC in light
of aforesaid conditions, enumerated in Section 16(2)(b) of the said Acts.

4.3 Whether there was receipt of goods or services?

The first and essential condition for availing Input Tax Credit is that there should be
supply of goods and/or services which are used or intended to be used in the course
of furtherance of his business. An Alert Circular No. 11/2023-24 dated 18.03.2024
was issued by the Principal Additional Director General, DGGI, Kolkata Zonal Unit,
4/2, Karaya Road, Kolkata 700017 regarding M/s Auexia Traders. In the Alert
circular, it is ascertained without any doubt that M/s Auexia Traders issued invoices
fraudulently without any material supply of goods only to pass on illegal benefit of
ITC to the recipient of fake invoices. The registration of M/s. Auexia Traders is
cancelled Suo-Moto. So, it appears that there was not at all any material supply.
Therefore, it can be construed that receipt of goods by the said taxpayer is not
possible.
4.4 The burden of proof, in case of eligibility of ITC availed by the said taxpayer lies
entirely on them, as given in Section 155 of the said Act. In the instant case, the said
taxpayer failed to satisfy all the mandatory conditions to make themselves eligible for
availing ITC on supply of goods mentioned in the impugned invoices, as envisaged in
Section 16(2)(b) of the said Act.

5. Framing of charge:
5.1. M/s. Auexia Traders, having principal place of business at 853, Nawabgabj, Ghose
Para Road, Ichhapore, North 24 Pgs, Kolkata- 743144, is a fake entity. An Alert
Circular No. 11/2023-24 dated 18.03.2024 was issued by the Principal Additional
Director General, DGGI, Kolkata Zonal Unit, 4/2, karaya Road, Kolkata 700017
against M/s Auexia Traders. In the said Alert circular, it is construed without any
doubt that M/s. Auexia Traders issued invoices fraudulently only to pass on illegal
benefit of ITC to the recipient of fake invoices. The registration of M/s Auexia Traders
is cancelled Suo Moto, which conversely proves that M/s Auexia Traders issued
fake invoices and passed on ITC to the different entities all over India as per their
GSTR-1 Returns available in the AIO. One of such entities is the said taxpayer, who
received ITC of ₹ 4,17,788/- from M/s Auexia Traders against the fake invoices
without actual receipt of Goods/Services and appeared to be in violation of Section
16(2)(b) and Section 155 of the said Act as discussed in para 4.1 & 4.2 above.
5.2. M/s. S.S BOUTIQUE, having PPoB at Block IV, Room No.- 2D, Diamond Chamber, 4
Chowranghee Lane, Kolkata, West Bengal - 700016 was well versed with the GST

Page 4 of 8
 laws and provisions of taxations. They should have taken reasonable steps to ensure
genuineness of ITC being availed of by them. As stated above, the burden lies on the
taxpayer to prove that the ITC was eligible to them or not. However, on investigation,
it has been observed that the taxpayer availed the ITC of ₹ 4,17,788/- without any
supply of goods or services. Therefore, the entire activity did not have any legal
sanctity and no tax was actually paid to the Government and therefore, the said
taxpayer was not eligible to avail ITC on such invoices in terms of the provisions of
Section 16 of the said Acts. M/s S. S. BOUTIQUE deliberately availed of such
inadmissible ITC with the sole intention to defraud the Government Exchequer. Had
the departmental officers not initiated the enquiry, such wrong availment of ITC
would have remained unnoticed and M/s S. S. BOUTIQUE would have continued to
enjoy this unlawful benefit. Therefore, the extended period of limitation is invocable
in this instant case and the inadmissible ITC is recoverable in terms of Section
74(1) of the CGST Acts read with rule 142 of the said Rules.
6. Now, therefore, M/s. S.S BOUTIQUE, having GSTIN 19AJCPR4788H1ZL, was thereby
called upon to Show Cause to the Superintendent of Central Tax, Range-V, Park
Street Division, Kolkata South CGST & Central Excise Commissionerate, at 180,
Rajdanga Main Road, GST Bhawan, Kolkata 700107, within 30 days of receipt of this
notice as to why:
(i) Inadmissible ITC of ₹ 4,17,788/- [Rupees Four Lakh Seventeen Thousand
Seven Hundred and Eighty-Eight only] (CGST of ₹ 2,08,894/- & SGST of ₹
2,08,894/-) in terms of Section 74(1) of the said Acts read with Rule 142 should
not be demanded from him for availment of inadmissible ITC against the invoice
issued by M/s Auxesia Traders without actual supply of goods and services.
(ii) Interest at appropriate rate should not be charged and recovered from them on
the amount of inadmissible availment of ITC of ₹ 4,17,788/- as mentioned at Sl. No.
(i) above under Section 50 read with section 74(1) of the said Acts;
(iii) Penalty under Section 74(1) of the said Acts should not be imposed upon them for
contravention of the provisions of the said Acts as mentioned above in respect of the
amount mentioned at Sl. No. (i) above.

7.0 DEFENCE REPLY: The said noticee furnished a reply letter dated 03rd September
2024 wherein the noticee denied and disputed the allegations made in the said notice
and inter-alia stated that they are engaged in trading business so unless the goods
are purchased the same cannot be sold, and therefore the fact that invoices have
been raised without actual delivery of goods is totally null and void. They also
attached the invoice copies of purchase made by them from M/s Auxesia Traders,
details of payment made against the said purchases and ledger in the name of
supplier maintained by them.

8.0 PERSONAL HEARING & DEFENCE SUBMISSION:

8.1 Observing the principles of natural justice, the said noticee was granted opportunity
to be heard in person on 19.09.2024 and another date on 30.09.2024. The said
noticee vide a letter dated 27.09.2024 sought for adjournment of the Personal
hearing scheduled on 30.09.2024 as on the said date their CA would be out of town.
They asked for another date of personal hearing. Therefore, another date for Personal
Hearing was fixed on 14.10.2024. But neither the said noticee nor their authorized
representative appeared on the said date for the Personal Hearing. As the
adjudication measures cannot be procrastinated sine die, I have no alternative but to
proceed to adjudicate the case in hand ex partè on the basis of the case records

Page 5 of 8
 available with the Department and findings thereon after observing the principles of
natural justice.

9.0 Discussion and Findings:

9.1 I have carefully gone through the facts and records of the case including the
impugned Show Cause cum Demand Notice. The solitary issue to be decided is as
under:-

 Whether the said noticee have availed and utilised irregular Input Tax Credit
(hereinafter referred to as ‘ITC’) to the tune of ₹ 4,17,788/- [Rupees Four Lakh
Seventeen Thousand Seven Hundred and Eighty Eight only] (CGST of ₹ 2,08,894/-
& SGST of ₹ 2,08,894/-) on the strength of ITC reflected in their GSTR-2A during
the F.Y. 2017-18 & 2018-19 without any actual receipt of Goods due to the non-
existence of the suppliers with an intent to evade payment of tax by way of
fraudulently availing the said ITC which is recoverable from them under Section
74(1) of the said Act along with applicable interest under Section 50(3) and penalty
under Section 74(1) of the said Act & related Sections of the WBGST Act, 2017 or
not.

9.2 In the said Show Cause cum Demand Notice, the question of violation of the
provisions of Section 16(2)(b) & & Section 155 of the CGST Act, 2017 read with the
related provisions of the WBGST Act, 2017 and Rule 36 of Central Goods and Services
Tax Rules, 2017 read with the related provisions of West Bengal Goods and Services
Tax Rules, 2017; in as much as the said noticee /tax payer availed and utilized
irregular credit of CGST & SGST for the Financial Year 2017-18 & 2018-19
amounting to of ₹ 4,17,788/- [Rupees Four Lakh Seventeen Thousand Seven
Hundred and Eighty Eight only] (CGST of ₹2,08,894/- & SGST of ₹ 2,08,894/-)
has been raised.

9.3 Also, the Irregular ITC availed and utilized to the tune of ₹ 4,17,788/- [Rupees
Four Lakh Seventeen Thousand Seven Hundred and Eighty Eight only] (CGST of
₹2,08,894/- & SGST of ₹ 2,08,894/-) for the F.Y. 2017-18 & 2018-19, availed on
the basis of invoices issued by the supplier M/s Auexia Traders (GSTIN:
19APGPB1744M1ZS) of the recipient M/s. S.S BOUTIQUE, having GSTIN
19AJCPR4788H1ZL during the F.Y. 2017-18 & 2018-19, who has been found to be
a fake entity as per Alert Circular No.- 11/2023-24 dated 18.03.2024 issued by the
Principal Additional Director General, DGGI, Kolkata Zonal Unit, 4/2, karaya Road,
Kolkata - 700017 against M/s Auexia Traders. In the Alert circular, it was
ascertained without any doubt that M/s Auexia Traders issued invoices fraudulently
only to pass on illegal benefit of ITC to the recipient of fake invoices without any
material supply of goods. The registration of M/s Auexia Traders was cancelled Suo-
Moto with effect from 29.09.2020, has been demanded in the impugned notice but
the said noticee contended the irregular availment of such ITC on the grounds as
mentioned below:

Page 6 of 8
 Sr. Noticee’s contention Adjudicating authority’s findings
No.
01 They are into trading business The main issue behind the issuance of this
so unless the goods are Show Cause notice is the fact that the
purchased the same cannot be supplier M/s Auexia Traders (GSTIN:
sold, and therefore the fact that 19APGPB1744M1ZS) is non-functioning and
invoices have been raised that they are not making any supply of
without actual delivery of goods goods or services but merely issuing invoices
is totally null and void for passing on ITC. Therefore, the claim of
the noticee that they have received the goods
otherwise how could they have sold it, is a
weak argument. They failed to show any
stock register, entry copy or Goods Receipt
Note against receipt of goods from the said
fake supplier. The entry of payment made to
supplier has also not been established by
their bank statement.
As, burden of proof, in case of eligibility of
ITC availed by the taxpayer lies entirely on
them, as given in Section 155 of the said Act.
In the instant case, the said taxpayer failed
to satisfy the mandatory conditions of
receipt of goods to make themselves eligible
for availing ITC on supply of goods
mentioned in the impugned invoices, as
envisaged in Section 16(2)(b) of the said Act.

9.4 As per clause (b) of sub-section (2) of section 16 of the CGST Act, 2017; it is crystal
clear that the registered person shall not be entitled to the credit of Input Tax in
respect of supply of goods or services or both where the supply has actually not been
received. However, I find that the Taxpayer have availed Input Tax Credit for the
Financial Year 2017-18 & 2018-19 amounting to a total of ₹4,17,788/- [Rupees
Four Lakh Seventeen Thousand Seven Hundred and Eighty Eight only] (CGST of ₹
2,08,894/- & SGST of ₹ 2,08,894/-) on the strength of invoices issued by the said
fake supplier during the F.Y. 2017-18 & 2018-19, which clearly contravenes the
provision of Sec. 16(2)(b) of the CGST Act, 2017.

9.5 Therefore, the said noticee has wrongly availed the fake ITC which they have admitted
& the wrongly availed & utilized fake ITC to the tune of ₹ 4,17,788/- [Rupees Four
Lakh Seventeen Thousand Seven Hundred and Eighty Eight only] (CGST of ₹
2,08,894/- & SGST of ₹ 2,08,894/-) which is liable to be recovered from them in
terms of Section 74(9) of the CGST Act, 2017 & related provisions of the WBGST Act,
2017. Since the said noticee made undue delay in payment of tax, they are also liable
to pay interest on such unpaid amount under Section 50(3) of the said Act.

9.6 Also, the said taxpayer is liable to pay a penalty in terms of Section 74(9) of the said
Act for their such act of non-compliance of statutory provisions of GST laws and
defrauding the Government.

10.0 In view of the above discussion and findings, I pass the following order: -

Page 7 of 8