Patiala Court sought response on the non-initiation of action against firms evading GST from CBIC

Last updated: 08 October 2021

Save Share

Quick Summary

The Patiala House Court has questioned the Central Board of Indirect Taxes and Customs (CBIC) for failing to act against companies evading Goods and Services Tax (GST) amounting to ₹940 Crores. While the State GST (SGST) department claims to have taken action and shared information with the Central GST (CGST) department, the CGST authorities have reportedly not pursued action against all delinquent firms. The court expressed dismay at the 'blame game' between departments instead of addressing the substantial tax evasion.

Court :
Patiala House Court

Brief :
In State v. Mohit Maan [FIR No. 301/2020 dated September 29, 2021] the Honorable Patiala House Court sought a response from Central Board of Indirect Taxes and Customs ("the CBIC") for not initiating appropriate action against delinquent firms involved in Goods and Services Tax (GST) evasion worth Rupees 940 Crores.

Citation :
FIR No. 301/2020 dated September 29, 2021

In State v. Mohit Maan [FIR No. 301/2020 dated September 29, 2021] the Honorable Patiala House Court sought a response from Central Board of Indirect Taxes and Customs ("the CBIC") for not initiating appropriate action against delinquent firms involved in Goods and Services Tax (GST) evasion worth Rupees 940 Crores.

The Assistant Commissioner appeared on behalf of State Goods and Services Tax (SGST) and has claimed that they have already initiated action at their end not only against the delinquent firms but also against their employees. However, the Assistant Commissioner has categorically insisted that information was duly shared by them with the Central Goods and Services Tax (CGST) and yet the CGST Authorities was not inclined to initiate any action against the remaining 202 firms out of 486 firms.

The Honorable Patiala House Court said that from the replies filed on behalf of the CGST Dept, a very sorry state of affairs is revealed. Evidently, as per the claim of the CGST Dept, the SGST Dept is not even aware of the correct address of the CGST offices.

"The Court is in pain to observe that instead of initiating appropriate action against the delinquent firms in the matter, wherein as per the claim of Delhi Police, a tax evasion of Rs.940 crores is involved, the authorities are involved in the blame game. Unfortunately, none is present on behalf of SGST and even no reply has been filed on behalf of Chairperson, CBIC," the Court while expressing its dissatisfaction said.

FAQ :

The court is questioning the Central Board of Indirect Taxes and Customs (CBIC) for not taking appropriate action against firms that have evaded Goods and Services Tax (GST) worth ₹940 Crores.

The SGST department claims to have initiated action against both the delinquent firms and their employees, and stated that information was shared with the CGST authorities.

Despite receiving information from SGST, the CGST authorities have reportedly not taken action against 202 out of 486 firms involved in GST evasion.

The court noted a 'sorry state of affairs', indicating that the CGST department's replies suggested a lack of awareness, even about the correct addresses of CGST offices, and that they were engaged in a 'blame game'.

No, the court noted that no one was present on behalf of the SGST and no reply had been filed by the Chairperson of the CBIC.