Case Details: Manoja Kumar Nayak vs. Commissioner Goods and Services Tax and Central Excise, Rourkela - [2026] 185 taxmann.com 501 (Orissa)
Judiciary and Counsel Details
- Harish Tandon, CJ. & Murahari Sri Raman, J.
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Rudra Prasad Kar, Sr. Adv., Asit Kumar Dash, Abhishek Dash & Aditya Narayan Ray, Advs. for the Petitioner.
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Sujan Kumar Roy Choudhury & Mukesh Agarwal, Sr. Standing Counsels for the Respondent.
Facts of the Case
The petitioner, a GST-registered transporter, was issued a show cause notice under Section 74 alleging wrongful availment of IGST input tax credit (ITC) on the basis of fake invoices issued by a purportedly non-existent supplier. The proceedings were initiated largely on the basis of a DGGI alert and the supplier’s admission, without any independent verification. The petitioner had, however, already reversed the entire disputed ITC voluntarily through GSTR-3B prior to issuance of the SCN and maintained sufficient balance in the Electronic Credit Ledger. The SCN was issued for FY 2017–18 beyond the normal limitation period by invoking extended limitation.
High Court Held
The High Court held that proceedings under Section 74 were unsustainable as they were based solely on third-party statements without independent inquiry or evidence of fraud, wilful misstatement, or suppression. Invocation of extended limitation after expiry of the normal period was invalid. Further, since the petitioner had already reversed the ITC before issuance of SCN and had sufficient credit balance (with no utilisation of such ITC), no interest under Section 50 or penalty could be levied. Demand of tax equal to already reversed ITC amounted to impermissible double taxation. Accordingly, the SCN and resultant orders were quashed.
List of Cases Reviewed
- C.C.,C.E. & S.T., Bangalore v. Northern Operating Systems (P.) Ltd. [2022] 138 taxmann.com 359/92 GST 792/61 GSTL 129 (SC) (para 8.24)
- UOI v. Bharti Airtel Ltd. [2021] 131 taxmann.com 319/54 GSTL 257/[2022] 89 GST 1 (SC) (para 8.24)
- Lipi Boilers Ltd. v. CCE (2025) 11 SCR 578 (para 8.24), followed
List of Cases Referred to
- C.C.,C.E. & S.T., Bangalore v. Northern Operating Systems (P.) Ltd. [2022] 138 taxmann.com 359/92 GST 792/61 GSTL 129 (SC) (para 8.18)
- State of Karnataka v. Ecom Gill Coffee Trading (P.) Ltd. [2023] 148 taxmann.com 352/72 GSTL 134 (SC) (para 8.19)
- UOI v. Bharti Airtel Ltd. [2021] 131 taxmann.com 319/54 GSTL 257/[2022] 89 GST 1 (SC) (para 8.21)
- Lipi Boilers Ltd. v. CCE (2025) 11 SCR 578 (para 8.23).
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