A number of cases have come to notice where the registered persons are found to be involved in issuing tax invoice, without actual supply of goods or services or both in order to enable the recipients of such invoices to avail and utilize ITC fraudulently. Clarification on demand and Penalty in respect of said cases is issued

The fundamental principles that have been delineated in the above scenarios may be adopted to decide the nature of demand and penal action to be taken against a person for such unscrupulous activity. Actual action to be taken against a person will depend upon the specific facts and circumstances of the case which may involve complex mixture of said scenarios or even may not be covered by any of the said scenarios.