Farm Peace group GST cases include Rs 4.90 crore demand

Farm Peace group companies disclose GST proceedings with stated demands up to Rs 4.90 crore, led by a 2022-23 show-cause notice against Vireshvar Iron and Steel Private Limited. The cases mainly allege that input tax credit was claimed from fictitious, non-existent or retrospectively cancelled suppliers without actual receipt of goods; the companies contest several allegations.

What GST cases do Farm Peace group companies face?

Farm Peace group companies face indirect-tax proceedings focused mainly on input tax credit, or ITC, claimed on disputed purchases. ITC is the credit available for GST paid on business inputs, subject to conditions in section 16(2) of the Central Goods and Services Tax Act, 2017, or CGST Act. The disclosures identify Sharneshvar Alloys Private Limited and Vireshvar Iron and Steel Private Limited as the group entities with the detailed GST proceedings.

The cases cover financial years 2017-18 to 2023-24 and sit at different stages. Some are intimation notices or show-cause notices, which allow a taxpayer to respond before an order; others are adjudication orders or appellate decisions that remain subject to further challenge. The stated demand amounts can include tax, interest and penalty, so they are not equivalent to the alleged ITC alone.

Section 74 of the CGST Act is used in many listed proceedings. The provision permits recovery action where tax is alleged to have been unpaid or ITC wrongly availed or utilised because of fraud, wilful misstatement or suppression of facts. Several orders also cite section 50 for interest and section 122 for penalties, explaining why a demand may include a penalty equal to the tax component.

Which Farm Peace group company has the largest stated demand?

Vireshvar has the largest stated GST demand in the disclosure, at Rs 4.90 crore for 2022-23. A show-cause notice dated April 20, 2024 alleged that Vireshvar wrongly claimed ITC of Rs 2.17 crore from certain fictitious firms without actual receipt of goods; the stated demand included Rs 56.68 lakh of interest and an equal penalty. Vireshvar denied wrongdoing and the matter is described as pending.

Vireshvar also discloses a Rs 3.75 crore demand for 2018-19 following an order dated December 10, 2025. The authority stated that Adarsh Enterprise, Arsh Traders and Arihant Traders were non-existent or non-genuine entities issuing invoices without actual movement of goods. The stated amount comprised Rs 1.14 crore of tax, Rs 1.47 crore of interest and Rs 1.14 crore of penalty.

For Sharneshvar, the Rs 3.81 crore 2022-23 notice alleged Rs 1.68 crore of ITC from fictitious firms without actual receipt of goods. A separate 2019-20 order confirmed Rs 3.51 crore, comprising Rs 1.11 crore of tax, Rs 1.29 crore of interest and Rs 1.11 crore of penalty. The order directed payment by June 14, 2026, failing which it stated that recovery proceedings would begin, while also recording the matter as pending.

What are the authorities alleging about Farm Peace group GST cases?

The authorities allege that the disputed ITC did not satisfy statutory requirements because goods were not genuinely supplied, suppliers were non-existent, or supplier GST registrations had been cancelled. In the Sharneshvar 2019-20 order, the adjudicating authority cited physical verification and Directorate General of GST Intelligence investigations and held that suppliers were non-existent and invoices were issued without actual supply.

The department has also alleged that reflection of a credit in GSTR-2A does not by itself prove eligibility. GSTR-1 is a supplier’s outward-supplies return, GSTR-3B is a summary GST return and GSTR-2A is the recipient’s auto-generated purchase information. In certain orders, the authorities relied on transport records, toll-plaza data, e-way bills, supplier investigations and statements, and held that documentary material did not establish actual receipt of goods.

A March 23, 2026 notice to Sharneshvar covering 2020-21 to 2023-24 alleged ITC of Rs 99.01 lakh from suppliers whose registrations had been cancelled by the department before invoice issuance. The notice alleged a contravention of section 16(2)(a) and section 16(2)(c), which concern possession of valid tax documents and payment of tax to the government. The subsequent May 6, 2026 show-cause notice gave Sharneshvar 30 days from receipt to submit evidence and request a personal hearing.

How do the group companies contest the ITC allegations?

Sharneshvar and Vireshvar say their purchases were genuine and that suppliers held valid GST registrations when transactions occurred. In several replies, the companies state that suppliers filed GSTR-1 and GSTR-3B, causing the relevant credits to appear in GSTR-2A. They also argue that retrospective cancellation of a supplier’s GST registration was beyond the recipient’s control.

The companies further say goods were received and payments were made through banking channels. In matters involving Vireshvar, the disclosures refer to invoices, e-way bills, weighment slips, photographs of loaded and unloaded vehicles, driver details and bank-payment records submitted to support the transactions. The tax authorities have nevertheless held in certain orders that this evidence did not discharge the burden under section 155 of the CGST Act to prove ITC eligibility.

The companies also raise procedural and legal objections in selected cases. These include assertions that section 74 should not apply without proof of fraud, wilful misstatement or suppression, that notices were time-barred, and that adequate opportunity or supporting records were not provided. Those arguments matter because section 74 proceedings can lead to tax recovery, interest and penalties, but the disclosure does not state the final outcome of the matters marked pending.

How far have the Farm Peace group GST cases progressed?

Several Farm Peace group GST cases have progressed from notices to orders or appeals, although the relevant proceedings remain pending. Sharneshvar’s 2018-19 case shows a changed outcome on appeal: an original order confirmed tax of Rs 10.47 lakh, interest and a Rs 1.24 lakh penalty, while a September 29, 2025 appellate order partly allowed the appeal. It upheld a reduced tax balance of Rs 9.05 lakh and a Rs 1.10 lakh penalty, plus interest.

Vireshvar’s 2019-20 case also moved from a show-cause notice to an order. The April 2024 notice sought Rs 2.53 crore, while the March 16, 2026 Form GST DRC-07 order confirmed Rs 2.81 crore, consisting of Rs 88.79 lakh tax, Rs 1.03 crore interest and Rs 88.79 lakh penalty. The higher total reflected interest, while tax and penalty aligned with the earlier allegation.

Not every proceeding concerns alleged fake invoices. Vireshvar’s 2021-22 section 73 case involved scrutiny of returns, including reverse-charge mechanism liabilities, short payment and excess ITC. The department had initially stated a Rs 14.32 crore liability but, after accepting most submissions, confirmed Rs 25,172 in an order dated December 20, 2025. That contrast shows why the listed figures cannot be treated as a single category of final liabilities.

Conclusion

Farm Peace group GST cases represent a broad legal overhang for Sharneshvar and Vireshvar, with the largest stated demand at Rs 4.90 crore. The central dispute is whether the companies can establish actual receipt of goods and eligibility for ITC when tax authorities say suppliers were non-genuine, non-existent or retrospectively cancelled, while the companies rely on registrations, returns, delivery records and banking-channel payments.

The next developments to watch are Sharneshvar’s response to the May 6, 2026 show-cause notice concerning Rs 99.01 lakh of alleged ITC, payment and recovery steps attached to confirmed orders, and pending appeals or personal hearings. Those proceedings will determine whether the stated demands are modified, sustained or set aside.