COMMISSIONER INLAND REVENUE vs MUSTAFA ENTERPRISES Ss — 2025 SCMR 1737 SUPREME-COURT

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COMMISSIONER INLAND REVENUE VS MUSTAFA ENTERPRISES Ss. 2(37), 6,7,8,22,23,26 & 73---Input tax, claim of---Issuance of fake/ flying invoices, allegation of---Proof---Allegation was that the registered person /company did not purchase any coal from the local suppliers but unlawfully claimed input tax on the basis of fake/ flying invoices issued by dubious suppliers, therefore, causing loss to the national exchequer--- Order of the Appellate Tribunal Inland Revenue in favour of registered person was concurred with by the High Court---Validity---Pertinently, the proceedings in the matter were initiated pursuant to issuance of Show Cause Notice wherein the respondents were not confronted with any invoices, the value of which was above Rs. 50,000/---No material or evidence whatsoever was provided to substantiate the allegation to the effect that the suppliers as mentioned in the Show Cause Notice were blacklisted during the tax period under consideration---In the present case, Show-Cause Notice and the Order-in-Original were passed on vague and frivolous allegations and certain conclusions had been made on mere presumptions only, whereas, no material or evidence had been produced to substantiate the same---Notably, while passing the Order-in-Original, the Assistant Commissioner Inland Revenue exceeded his jurisdiction while travelling beyond the very premises, whereas the respondents were never confronted with the allegations made in the Show-Cause Notice or entries as reflected in the bank statement which were subsequently furnished by the respondents, showing the details of the total amount and the particulars of suppliers from whom purchases were made---While initiating the proceedings against the respondents, there was no material or evidence available on record to make out a case against the respondents of illegal or inadmissible claim of input tax adjustment, whereas the entire proceedings and the Order-in-Original passed in the present case was based on presumptions, whereas no inquiry or verification was made by the Department in respect of alleged fake/flying invoices---Thus, the Tribunal and the High Court were justified to set aside both the Order-in-Original and the Order-in-Appeal, while recording concurrent findings on facts which did not suffer from any illegality or error---Petition for leave to appeal, filed by Department, was dismissed, in circumstances.

COMMISSIONER INLAND REVENUE vs MUSTAFA ENTERPRISES Ss — 2025 SCMR 1737 SUPREME-COURT

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