Allahabad High Court: In a tax writ against the order passed by the Additional Commissioner as well as the impugned order passed by the Deputy Commissioner, Commercial Tax, Piyush Agrawal, J. held that that production of tax invoice, e-way bill, Guaranteed Remittance or payment details is not sufficient to show the actual physical movement of the transaction for the purposes of availing Input Tax Credit under Section 16 of the Goods and Service Tax Act, 2017.
Background:
The petitioner is a proprietorship firm which is engaged in the business of reselling and purchase of Peanut, Galla and Paddy. Thereafter, the Commissioners issued a show cause notice under Section 74 of the Goods and Service Tax Act, 2017 for June, July, August and September, 2020-21 to the petitioner for availing wrong input tax credit. The petitioner submitted his reply, but not being satisfied from the same, the Additional Commissioner, passed the order dated 24-08-2021 and imposed the tax upon the petitioner, amounting to Rs.20,31,775/- and penalty of equal amount as well, against which the petitioner preferred an appeal, which has also been rejected by the impugned order. Hence the current writ petition was filed.
Analysis and Decision:
The Court took note of Section 16 U.P. Goods and Services Act (‘UPGST Act’) and said that registered dealers can claim the benefit of input tax credit only on fulfilment of certain conditions as enumerated under the Act. Section 16 specifically provides the registered dealer to fulfil the conditions as provided therein for availment of input tax credit.
Further, after taking note of Section 74 of UP GST Act, the Court said that determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any wilful misstatement or suppression of facts empowers to issue notice that tax has not been paid or short paid or erroneously refunded or input tax credit has wrongly been availed or utilized by any reason or wilful misstatement or suppression of fact. Upon adjudication the assessee is required to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under Section 50 and a penalty equivalent to the tax specified in the notice.
Thus, the Court concluded that in the event of wrong availment of input tax credit, the proceedings can be initiated against the registered person or registered dealer but at the same time, restrictions has been imposed upon the authorities that without putting notice to the dealer, no adjudication proceeding can be initiated.
The Court noted that in the case in hand, the petitioner has only brought on record the tax invoices, e-way bills, and payment through banking channel, but no such details such as payment of freight charges, acknowledgement of taking delivery of goods, toll receipts and payment thereof has been provided. Thus, in the absence of these documents, the actual physical movement of goods and genuineness of transportation as well as transaction cannot be established and, in such circumstances, further no proof of filing of GSTR 2 A has been brought on record, the proceeding has rightly been initiated against the petitioner.
The Court referred to various Judgments, and the decision in State of Karnataka v. Ecom Gill Coffee Trading (P) Ltd., 2023 SCC OnLine SC 248, wherein it was held that “primarily burden of proof for claiming the input tax credit is upon the dealer to furnish the details of selling dealer, vehicle number, payment of freight charges, acknowledgement of taking delivery of goods, tax invoices and payment particulars etc. to prove and establish the actual physical movement of the goods. Further submitting tax invoice, e-way bill, Guaranteed Remittance or payment details is not sufficient”.
Thus, the Court dismissed the present petition.
[Anil Rice Mill v. State of UP, 2024 SCC OnLine All 4510, decided on 14-08-2024]
Advocates who appeared in this case :
Counsel for Petitioner: Pranjal Shukla
Counsel for Respondent: Chief Standing Counsel
