The GST Appellate Tribunal, Kolkata Bench, has partly allowed Revenue’s appeal and restored Section 74 proceedings for ITC of Rs. 43,44,046 availed on invoices issued by thirteen suppliers found to be non-existent from the date of their online registration.
The first appellate authority had converted the demand from Section 74 to Section 73, holding that no fraud was proved against the taxpayer. Revenue challenged this before the Tribunal.
The Tribunal, applying the Supreme Court’s rulings in State of Karnataka v. Ecom Gill Coffee Trading Private Limited [(2023) 111 GSTR 1 (SC)] and the recent M/S Tata Steel Limited v. Union of India (judgment dated 25.08.2026), held that mere production of tax invoices and bank payment evidence is insufficient to discharge the burden of proof under Section 155 of the CGST Act. The taxpayer must establish actual physical movement of goods by furnishing details of delivery vehicles, freight charges, acknowledgment of delivery, and stock records.
The Tribunal found that the taxpayer was “fully aware of the fact that the suppliers on whose invoice he availed and utilised ITC were non-existent” and that his conduct “clearly demonstrates that he deliberately defrauded the revenue for taking ineligible ITC.”
The Tribunal also confirmed that consolidated show cause notices covering multiple financial years are permissible under Section 74, following the Delhi High Court in Ambika Traders v. Additional Commissioner [(2025) 148 GSTR 1 (Delhi)].
However, the Tribunal upheld Section 73 treatment for the ITC mismatch demand (reduced to Rs. 1,93,812) and the RCM demand (reduced to Rs. 20,472), applying Pushpam Pharmaceuticals Company v. Collector of Central Excise [1995 Supp (3) SCC 462] on the meaning of “suppression.”
The taxpayer was permitted to apply for amnesty under Section 128A for the Section 73 demands.
The Commissioner CGST & CX, Kolkata North Commissionerate v. Partner Jay Technical Services | APL/19/KLK/2026 | 1 September 2026 | GSTAT Kolkata Bench