Bharat Raj Punj S/O Late Brij Raj Punj vs. Commissioner Of Central Goods And Service Tax Department

Held

The Court held that the miscellaneous application was partly allowed. Regarding the first issue, the Court found that the argument raised by the counsel for the Central Goods and Service Tax Department, stating that fake invoices of CR Sheet/Coils were issued without any physical movement/transaction of goods, had been wrongly typed as the contentions of the petitioner's counsel in paragraph 8 of the order. The Court directed that this portion be deleted from paragraph 8 and inserted into paragraph 10 after "in the reply." Concerning the second issue, the Court perused the pleadings and found that the department's specific case was that ITC was claimed on fake invoices to the tune of Rs. 328,36,73,701/-, and that Rs. 40,53,58,772/- ITC claimed by the petitioner was based on fake invoices, which was a specific allegation by the department that was not controverted by the petitioner. Therefore, the Court found no error in the remaining part of the judgment concerning this point. The ratio decidendi is that courts should correct factual errors in their orders when pointed out, particularly concerning the attribution of arguments and the record of controverted allegations, but only if the correction is factually supported by the record and pleadings.

Facts

The petitioners, M/s Leel Electricals Limited and its Managing Director, filed a miscellaneous application before the High Court of Rajasthan, Bench at Jaipur, seeking correction of alleged errors in a previous order dated March 12, 2019. The petitioners contended that in paragraph 8 of the order, the arguments made by the counsel for the Central Goods and Service Tax (CGST) Department were mistakenly attributed to the petitioner's counsel. Specifically, the statement regarding fake invoices issued without physical movement of goods was wrongly placed. Additionally, the petitioners argued that paragraph 18 of the order incorrectly stated that they had not controverted the allegations of claiming input tax credit (ITC) on fake invoices, whereas these points were indeed raised in their pleadings. The disputed amount of ITC claimed on fake invoices was stated to be Rs. 40,53,58,772/-, with a total of Rs. 328,36,73,701/- involved in fake invoices.

Key Issues

1. Whether the arguments of the CGST Department's counsel were erroneously recorded as those of the petitioner's counsel in paragraph 8 of the impugned order, specifically concerning the issuance of fake invoices without physical movement of goods? (Mixed question of fact and law) 2. Whether the impugned order incorrectly stated in paragraph 18 that the petitioner had not controverted the allegations of claiming input tax credit (ITC) on fake invoices, when such contentions were present in the petitioner's pleadings? (Mixed question of fact and law) Contentions of the Petitioner: The petitioner argued that the court's order contained factual inaccuracies regarding the attribution of arguments and the controversion of allegations. They pointed out specific errors in paragraphs 8 and 18 of the order, claiming that the court mistakenly attributed the revenue's arguments to them and wrongly stated that they had not controverted material allegations regarding fake invoices and ITC claims. The petitioner asserted that their pleadings did indeed address these points. Contentions of the Respondent (CGST Department): The respondent did not record any specific arguments in response to the miscellaneous application in the provided judgment excerpt. The court's reasoning in paragraph 6 indicates that the department's case was that ITC was claimed on fake invoices to the tune of Rs. 328,36,73,701/-, and the petitioner had not controverted the claim of Rs. 40,53,58,772/- ITC on fake invoices.