Law: Sales Tax Act, 1990

Section: 2,2(37)

(a) Sales Tax Act (VII of 1990)---S.2(37)---Tax fraud---Fake invoices---Adjustment of input tax against invoices issued by the fraudster gang---Mandatory condition precedent for tax fraud is that registered person has acted knowingly, dishonestly or fraudulently and without any lawful excuse committed tax fraud---Not an iota of evidence was available on record wherefrom it could be deduced that the registered person had intentionally, knowingly or dishonestly or fraudulently committed tax fraud by claiming in put tax adjustment against the sales tax invoices issued by the fraudster gang---Even the audit/contravention report coupled with the show-cause notice did not spell out or it could be proved by the department that the registered person had claimed illegal input tax adjustment with prior knowledge regarding fakeness of the sales tax invoices---Registered person was not intentional defaulter and was equally cheated by the fraudulent persons and fraudsters charged tax from the registered person---Revenue had wrongly invoked the provision of S.2(37) of the Sales Tax Act, 1990 in the show-cause notice which was liable to be struck down. GST 2004 CL 102 ref. (b) Sales Tax Act (VII of 1990)----S.2 (37)---Tax fraud---Any act which had not been done knowingly, dishonestly or fraudulently did not come within the ambit of tax fraud. (c) Sales Tax Act (VII of 1990)----Ss.37 & 2(37)---Power to summon persons to give evidence and produce documents in inquiries under the Act---Tax fraud---Issuance of show cause notice based on criminal case registered by the Directorate of Intelligence and Investigation, against the fraudster gang engaged in issuance of fake/dummy sales tax invoices---Validity---Registered person was neither involved in the illegal activities nor there was any evidence or record that he was in contact with the fraudster gang regarding issuance of fake and dummy sales tax invoices---Contention of registered person was accepted by the Appellate Tribunal. (d) Sales Tax Act (VII of 1990)----Ss.23, 73, 3(3) & 2(37)---Tax invoices---Tax fraud---Registered person had purchased entire raw material from registered persons and also obtained sales tax…

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