Notices issued after illegal GST collection found at Patang Hotel, Dharmadev Infrastructure sites

GST officials in Ahmedabad found evidence of multiple irregularities during recent searches at the well-known Patang Hotel, the Shyamal Crossroads office of Dharmadev Infrastructure, and the company’s construction site in Naroda.

According to sources, the CGST department had cancelled the GST registration of Patang Hotel nearly six months ago for failing to deposit GST dues for almost two years. Despite the cancellation, GST continued to be collected on food bills issued at the hotel. Under GST rules, once a registration is cancelled or suspended, a business cannot collect GST on sales, nor can it legally continue such transactions without reinstatement.

Preliminary findings indicate that GST was collected at the rate of 5% on food bills for an extended period even after cancellation of the registration. Officials estimate that more than ₹1.5 crore may be due for deposit, and with interest and penalties, the amount could rise to over ₹4 crore. Notices have already been issued to the company in this regard.

The searches at Patang Hotel two weeks ago reportedly yielded documents supporting these findings. Investigations into the billing practices, collection of tax without a valid GST number, and non-deposit of earlier dues are currently underway.