Suppression and Fake-Invoice Findings Must Rest on Verified Records, Not Suspicion: GSTAT Agra

In two departmental appeals, the GST Appellate Tribunal’s Agra Bench set aside both the original and appellate orders and remanded the cases for entry-wise, record-based verification.

The GST Appellate Tribunal, Agra, has held that findings of fictitious trading or suppressed turnover must rest on an examination of the books, invoices, transport records and other evidence, and that neither a closed shop nor aggregate diary figures can settle the issue either way. The Bench of Ajeet Singh, Member (Judicial), and Vivek Kumar, Member (Technical), who wrote both orders, partly allowed two departmental appeals and remanded the matters [Vijay Pal Singh v. Chaudhary Iron Traders, 2026-juristway.com-3243-GSTAT(Agra)-GST; Commissioner State Tax (U.P) v. Mahaveer Pipe Store, 2026-juristway.com-3246-GSTAT(Agra)-GST].

Chaudhary Iron Traders. An iron scrap trader’s premises were found closed and marked “Vacant for Rent” on 3 Feb 2022, and a penalty of ₹44,26,603 was imposed under Section 122(1) for issuing and receiving invoices without supply. The Bench held that a closed shop after the business was discontinued did not prove fake trading, and that later cancellation of a supplier’s registration did not prove earlier supplies fictitious. But the first appellate authority had verified nothing, and “A finding that the transactions were fictitious must be founded upon an appropriate examination of the material evidence and not merely upon general suspicion.” The proper officer must hear the respondent and examine stock registers, weighment slips, transport and bank records and e-way bills.

Mahaveer Pipe Store. Turnover of ₹34,71,068 was treated as suppressed on the basis of three diaries seized on 7 Aug 2018, and the first appellate authority cut it to ₹95,734. The Bench found that neither order identified the diary entries relied upon, explained the alleged sale of 76 hand pumps, or verified the 85 B2B invoices produced in appeal. It held that “An inference of suppression cannot be sustained merely on the basis of an aggregate figure without a demonstrable factual basis for its computation.”

In both cases, the original and appellate orders were set aside, and the proper officers must pass fresh speaking orders after a hearing. The Mahaveer remand comes with eight specific directions, including entry-wise examination of the diaries and reconciliation with the returns.

2026-juristway.com-3243-GSTAT(Agra)-GST | 2026-juristway.com-3246-GSTAT(Agra)-GST