IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 10122 of 2025 ==========================================================

M/S KRUPA JEWELLERS Versus ASSISTANT COMMISSIONER OF STATE TAX - 3 ==========================================================

Appearance:

MR ASHUTOSH S DAVE(8865) for the Petitioner(s) No. 1 MS. SHRUNJAL T. SHAH, ASSISTANT GOVERNMENT PLEADER for the Respondent(s) No. 1 ==========================================================

CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA and HONOURABLE MR. JUSTICE PRANAV TRIVEDI Date : 28/07/2025

ORAL ORDER

(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)

1 Heard learned advocate Mr.Ashutosh Dave for the petitioner and learned Assistant Government Pleader Ms.Shrunjal Shah for the respondent. By this petition under Article 227 of the Constitution of India, the petitioner has prayed for quashing and setting aside the Order-in-Original dated 13.06.2025 passed by the respondent- Assistant Commissioner of State Tax, Unit-3, under sec.74(9) of the Gujarat Goods & Service Tax Act, 2017 (for short ‘the GST Act’) read with relevant rules of Gujarat Goods & Service Tax Rules, 2017 (for short ‘the GST Rules’), in Form GST DRC-07 for the Financial Year 2019-20.

2 The brief facts of the case are as under:

2.1 The petitioner is a proprietorship concern engaged into dealing in articles and articles of gold in powder form on wholesale basis as contemplated under HSN Code No. 7114 and 7106 respectively.

2.2 The petitioner is registered under the provisions of the GST Act with effect from 01.07.2017 and is maintaining the books of accounts and has also uploaded all the requisite returns timely with respect to the purchase and sale of goods on the E-portal i.e.

GSTIN.

2.3 It is the case of the petitioner that the respondent cancelled the registration of the petitioner with effect from 31.03.2022 upon the application made by the petitioner and order to that effect was passed on 12.05.2022 in Form GST REG -

19 with ‘Nil’ liability.

2.3 The petitioner, thereafter, received intimation in Form GST DRC-01A dated 14.05.2024 for the Financial Year 2019-20 under Sec.74(5) of the GST Act read with Rule142(1A) of the GST Rules. After scrutiny of the returns filed by the petitioner in Form GSTR-3B, GSTR-01, GSTR-2A, GSTR-9 and E-way bill data, it was found that the tax has not been paid or short paid or input tax credit has been wrongly availed or utilized by reason of fraud or any willful mis-statement or suppression of facts by the petitioner amounting to Rs.8,59,28,742/-

2.4 On receipt of the intimation in Form DRC-01A, the petitioner filed reply dated 15.05.2024 providing the ledger copies of the suppliers from whom the petitioner purchased the goods and made the payment. It was pointed out by the petitioner that the GST number of the parties referred to in the intimation, namely, Bharatkumar H. Prajapati, Choksi Keshavlal Laljibhai Naik, Prakashkumar Vrajlal Soni, Ravi Prakashbhai Soni, Harshit Enterprise were cancelled suo moto and the petitioner had made purchase from the said suppliers prior to the cancellation. The petitioner provided ledger confirmation bill copy and bank statement.

2.5 Thereafter, the respondent issued the notice in Form GSTDRC-01 dated 23.05.2024 under Sec.74(1) of the GST Act on the ground that the Input Tax claimed by the petitioner from M/s. Nadol Traders, M/s.Harshit Enterprise and M/s. Vishnu Gold and M/s. Kabir Enterprise, do not commensurate with the details as appearing in form GSTR 3B filed by the petitioner.

2.6 It was also stated in the show-cause notice that the said dealers obtained the GST registration number by employing fraudulent means and the dealers are now not traceable / non existent at their registered premises.

2.7 The petitioner by reply dated 08.06.2024 in GST DRC-06, uploaded the documents and further filed a reply dated 21.06.2024 contending that the petitioner has made a bonafide claim for input tax credit. Petitioner also submitted all th