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Business Standard
8 hours ago
- Business
- Business Standard
Allahabad HC rejects Patanjali Ayurved's plea against ₹273.5 cr penalty
The Allahabad High Court has dismissed Patanjali Ayurved Limited's petition challenging ₹273.50-crore goods and service tax (GST) penalty. A division bench comprising Justices Shekhar B Saraf and Justice Vipin Chandra Dixit rejected Patanjali's argument that such penalties constitute criminal liability and can be imposed only after a criminal trial. The bench was of the view that tax authorities can impose penalties under Section 122 of the GST Act through civil proceedings without requiring criminal court trials. The court clarified that GST penalty proceedings are civil in nature and can be adjudicated by proper officers. "After detailed analysis, it is clear that the proceeding under Section 122 of the CGST Act is to be adjudicated by the adjudicating officer and is not required to undergo prosecution," the bench said. Patanjali Ayurved operates three manufacturing units at Haridwar (Uttarakhand), Sonipat (Haryana) and Ahmednagar (Maharashtra). The company came under investigation following information received by authorities about suspicious transactions involving firms with high Input Tax Credit (ITC) utilisation but no income tax credentials. The investigation led to allegations that Patanjali "acting as a main person indulged in circular trading of tax invoices only on paper without actual supply of goods". The Directorate General of GST Intelligence (DGGI), Ghaziabad issued a show cause notice on April 19, 2024 to Patanjali Ayurved, proposing a penalty of ₹273.51 crore under Section 122(1), clauses (ii) and (vii) of the Central Goods and Service Tax Act 2017. Later, the DGGI dropped tax demands under Section 74 through an adjudication order dated January 10, 2025. The department found that "for all the commodities, the quantities sold were always more than the quantities purchased from the suppliers, thereby making the observation that all the ITC which was availed in the impugned goods was further passed on by the petitioner". Despite dropping the tax demand, authorities decided to continue with penalty proceedings under Section 122, prompting Patanjali to challenge this before the high court. After hearing both sides, the court in its judgment dated May 29 dismissed the petition.
Hindustan Times
10 hours ago
- Business
- Hindustan Times
Allahabad HC dismisses Patanjali's plea against ₹273.5 cr GST penalty
The Allahabad high court has dismissed Patanjali Ayurved Limited's petition challenging ₹273.5 crore goods and service tax (GST) penalty. Dismissing the writ petition, a division bench comprising Justice Shekhar B Saraf and Justice Vipin Chandra Dixit on May 29 rejected Patanjali's argument that such penalties constitute criminal liability and can be imposed only after a criminal trial. The court ruled that tax authorities can impose penalties under Section 122 of the GST Act through civil proceedings without requiring criminal court trials. The judgment clarified that GST penalty proceedings are civil in nature and can be adjudicated by proper officers. 'After detailed analysis, it is clear that the proceeding under Section 122 of the CGST Act is to be adjudicated by the adjudicating officer and is not required to undergo prosecution,' the court said. Patanjali Ayurved Ltd operates three manufacturing units at Haridwar (Uttarakhand), Sonipat (Haryana) and Ahmednagar (Maharashtra). The company came under investigation following information received by authorities about suspicious transactions involving firms with high Input Tax Credit (ITC) utilisation but no income tax credentials. The investigation led to allegations that Patanjali 'acting as a main person, indulged in circular trading of tax invoices only on paper without actual supply of goods.' The directorate general of goods and services tax Intelligence (DGGI), Ghaziabad, issued a show cause notice on April 19, 2024 proposing a penalty of ₹273.51 crore under Section 122(1), clauses (ii) and (vii) of the Central Goods and Service Tax Act 2017. The petitioner – Patanjali Ayurved Limited challenged it before the high court. However, in a significant development, the department subsequently dropped tax demands under Section 74 through an adjudication order dated January 10, 2025. The department found that 'for all the commodities, the quantities sold were always more than the quantities purchased from the suppliers, thereby making the observation that all the ITC which was availed in the impugned goods was further passed on by the petitioner.' Despite dropping the tax demand, authorities decided to continue with penalty proceedings under Section 122, prompting Patanjali to challenge it before the high court.
Indian Express
a day ago
- Business
- Indian Express
GST to staircase rules, Dharavi project seeks many exemptions
From tax exemptions to waivers on charges for any deficiencies in staircase and open space rules, the Dharavi redevelopment project has sought several key exemptions that are pending government approval. These, along with other issues awaiting clearance, were flagged in a presentation by the Navbharat Mega Developers Private Limited (NMDPL) — the special purpose vehicle (SPV) set up through a joint venture between Adani Properties Private Limited (80%) and the state government's Slum Rehabilitation Authority (20%) to execute the redevelopment project – during a high-level review meeting chaired by Chief Minister Devendra Fadnavis on May 28 at which the project master plan was cleared. When contacted, a senior official with the housing department said while these pending issues are yet to be cleared by various departments, they are not a part of the master plan. 'The pending issues raised are important for the project, and the respective departments will follow procedures and take a final decision,' the official said. According to NMDPL, these pending approvals are required to unlock land, complete legal formalities, reduce upfront costs, and proceed with housing and infrastructure components of the plan. These include land transfers, waivers on tax and staircase/ open space premium, regulatory relaxations that would help NMDPL carry out the redevelopment, rehabilitate slum dwellers and utilise the land parcels — including Kurla Dairy land, Jamasp Salt Pan in Mulund, Aksa and Malvani, Deonar, and Arthur & Jenkins Salt Works — that have been allocated for rehabilitation of ineligible residents of Dharavi. While the master plan envisages construction of 58,532 residential units and 13,468 commercial and industrial units on 116.6 acres of the existing Dharavi area for the rehabilitation of eligible residents, the NMDPL will utilise around 541 acres of land allotted to it across the city (outside of Dharavi) for construction of rental housing for ineligible residents. Besides, another 118.4 acres inside Dharavi, of the gross area of 620 acres, have been earmarked for commercial development. The developer has flagged at least eight key issues awaiting government approval — across departments including housing, urban development, revenue and finance — and requested that the decisions be finalised by July to maintain project momentum. The project is scheduled to be completed by 2032. NMDPL has requested final notification for reimbursement of State GST (SGST) paid on construction for 15 years in rehabilitation and 5 years in commercial units. This will help it to avail Input Tax Credit on the construction of rehabilitation as well as commercial units. The proposal asks the state to consider the functions of the redevelopment project under Article 243W of the Constitution, enabling exemption from 18% GST on 'pure services' like consultancy, project management and design (fees). A Government Resolution waiving or capping charges on the developer for staircase and open space deficiencies is pending with the Urban Development Department since January this year. These premiums or charges are applied when buildings/ projects have less open space or staircase area than required by rules. Waiving or reducing these charges would help lower the overall project cost. The developer has sought approval to use 35% fungible floor space index (FSI) to increase the size of renewal tenements (units inside Dharavi) beyond the standard 405 sq ft. As housing societies demand more than the minimum 405 sq ft, the SPV proposes using 35% fungible FSI to accommodate additional area, subject to viability. A proposal on this was sent in March this year. 'By letter dated 23.10.2023 and 18.06.2024, housing department was asked to provide clarity (on the carpet area of renewal tenements),' the NMDPL has said. So far, meetings have been held with the 18 housing societies inside Dharavi, and the developer has said the residents have been demanding a higher carpet area. As per regulations, the minimum carpet area is 405 sq ft. The NMDPL has sought sub-leasing rights to transfer developed units on 21 acres of Kurla Dairy land to societies/ end users. It has said that implementation of the project on land given via government resolutions of the revenue and forest departments cannot be undertaken without such sub-lease. Although a government resolution for allocation of 140 acres in Aksa and Malvani areas was issued in October 2024 and measurement was completed in January 2025, the NMDPL has said the Collector has not issued a payment demand notice, halting the possession of land. The NMDPL has said the demarcation of core Dharavi land by the superintendent of land records has been pending for over nine months even as reminders were sent in April and May. It points out that the process is critical for plotting, layout design, and planning approvals. The NMDPL has requested a waiver of stamp duty charges on long-term land leases, particularly those with central agencies like Railways, as government projects may be exempted from stamp duty under certain rules. Meanwhile, Rajendra Korde, president of the Dharavi Residents Association, said the number of new units being constructed was far lower than the number of existing units. He said surveys should first be conducted properly and every tenant should be considered eligible. Korde also demanded that the project master plan should be made public, and suggestions/ objections should be taken from the residents. According to the eligibility criteria for the redevelopment project, ground-floor residents who settled in Dharavi before January 1, 2000, can get a 350 sq ft house within Dharavi free of cost; those who settled between January 1, 2000, and January 1, 2011, can get a 300 sq ft house outside Dharavi for Rs 2.5 lakh under the Pradhan Mantri Awas Yojana (PMAY). Residents of upper-floor structures built before November 15, 2022, and ground-floor structures built between January 1, 2011, and November 15, 2022, will be offered rental accommodation outside Dharavi. They can also opt for a 'hire-purchase' scheme for 300 sq ft houses.
Indian Express
3 days ago
- Business
- Indian Express
Trader held for availing ITC worth Rs 15.19 cr by submitting fake invoices
A textile trader has been arrested by the Directorate General of GST Intelligence (DGGI) in Surat for allegedly submitting fake invoices of Rs 100 crore to avail Input Tax Credit worth Rs 15.19 crore. According to DGGI sources, the accused, arrested on Friday has been identified as Yatin Dudhat, a resident of Varachha, who runs textile business by the name of Dudhat International in Surat. Dudhat allegedly received fake invoices from different firms without any supply of goods. The officials had earlier raided his office and business place in Surat and recovered several incriminating documents. Dudhat has violated the provision of sections of 132 of Central Goods and Services Tax, Act, 2017, an official said. Sources said that the name of Dudhat cropped during a probe following the arrest of Chetan Patoliya, proprietor of Kunj Fashion, Surat. On Saturday, Yatin Dudhat was produced before Chief Judicial Magistrate court of Judge R M Kalotara. He was sent to 14 days judicial custody at Surat Central jail by court. DGGI sources added, they had carried out a search operation at Kunj Fashion, on May 2. During investigation, the officials found Patoliya's involvement in availing the Input Tax Credit of around Rs 12 crores, with the help of fake invoices of sales and purchase of goods. Patoliya in his statements to DGGI had mentioned that he had passed on (sold) ITC to different firms – including Infinity Impex, Salton Impex, Manya Overseas and Shreeji exports, without supply of goods – in Surat. The DGGI is currently carrying out a probe in this case and are collecting the details of the firms that had received ITC from Kunj Fashion and Dudhat International.
Hindustan Times
3 days ago
- Business
- Hindustan Times
Punjab: Mastermind behind ₹30-crore GST scam arrested
The Chandigarh zonal unit of the Directorate General of GST Intelligence (DGGI) claimed to have busted a network reportedly involved in generating fraudulent Input Tax Credit (ITC) through the issuance of invoices without the actual supply of goods. The mastermind, identified as Manmohan Singh of Ludhiana, has been arrested, it said. GST officials said the fraud involved multiple business entities, including M/s JHA and JHA Enterprises (Delhi), M/s Goyal Trading Agency (Delhi), M/s MAA Vaishno Enterprises (Delhi), M/s SS Enterprises (Ludhiana), M/s PC Techno Solutions (Ludhiana) and M/s PMI Smelting Private Limited (Ludhiana). These firms were found issuing fake invoices for zinc products, the DGGI mentioned. Preliminary analysis indicates a widespread network of bogus firms with the quantum of fraudulent Input Tax Credit currently estimated at approximately ₹30.21 crore. This figure is expected to rise as the investigation progresses. Investigations revealed that Manmohan Singh was actively involved in establishing and operating this racket, creating the aforementioned firms to generate and avail ineligible ITC. Furthermore, it has been uncovered that Singh, in collusion with other individuals under the agency's scanner, allegedly facilitated banking transactions and arranged cash movements in exchange for commissions to enable these illicit activities. An official said that Manmohan has been remanded to judicial custody. 'Such fraudulent activities pose a severe threat to the integrity and efficacy of the indirect taxation framework, undermining the foundational principles of transparency, equity and voluntary compliance. The generation of fictitious invoices and wrongful ITC claims not only distort market equilibrium by placing bona fide taxpayers at a competitive disadvantage but also results in significant revenue loss to the exchequer,' he added.
