2024 (3) TMI 123 - HC - VAT and Sales Tax

Availment of Input Tax Credit - appeal dismissed on the basis of invoices and bank transactions inasmuch as the transactions have not been proved as a bonafide and genuine transactions otherwise establishing the actual transportation of goods - finding of fact has been recorded against the dealer and the benefit has been allowed only on the basis of tax invoices and bank transactions - HELD THAT - In the present case, counsel on behalf of the revisionist has submitted that the documents in relation to the transportation of goods were also provided to the authorities below. However, the same do not find reflection in the order passed by the first appellate authority and the Tribunal. It is also true that the Tribunal has recorded finding that the Department has not been able to show any adverse document against the revisionist. The ratio of the decision of the Tribunal is contrary to the judgment of the Apex Court in THE STATE OF KARNATAKA VERSUS M/S ECOM GILL COFFEE TRADING PRIVATE LIMITED 2023 (3) TMI 533 - SUPREME COURT as the Tribunal has granted the I.T.C. merely on the basis of invoices and payment details. The order passed by the Tribunal is required to be quashed and set-aside with a direction to the Tribunal to hear the matter afresh allowing the revisionist to produce documents in relation to the transactions including transportation documents and any other relevant document which the petitioner wishes to place. The Department may also be allowed to adduce further evidence, if it so desires - The Tribunal to decide the matter afresh. The revision petition is, accordingly, allowed.

Summary

Issues involved:
The primary issue in the present writ petition is with regard to availment of Input Tax Credit (I.T.C.) by the respondent/assessee.

Issue 1: Burden of proof on the assessee for I.T.C. claim:
The revision petition under Section 58 of the Uttar Pradesh Value Added Tax Act, 2008 questions the dismissal of the appeal by the Commercial Tax Tribunal and the 1st Appellate Authority based on invoices and bank transactions. The burden of proof is upon the assessee to show the correctness of the I.T.C. claim, as per Section 16 of the Act. The Apex Court judgment emphasizes that the burden of proving the I.T.C. claim lies with the purchasing dealer, requiring proof of actual transaction details beyond invoices and payment particulars. Mere production of invoices or payment by cheques is insufficient to claim I.T.C. The genuineness of the transaction must be proved, failing which the I.T.C. claim can be rejected.

Issue 2: Contradictory stand of the Tribunal:
The Tribunal's order indicated discrepancies in the transactions, such as sellers not authorized to issue tax invoices and canceled registrations. However, the Tribunal allowed the I.T.C. claim based on RTGS payments and submitted invoices, contradicting its own findings. The Department failed to produce adverse documents against the assessee, but the Tribunal's decision granting I.T.C. solely on invoices and payment details goes against the legal requirement of proving the genuineness of transactions for I.T.C. eligibility.

Judgment:
The High Court quashed and set aside the Tribunal's order, directing a fresh hearing to allow the revisionist to present transportation and relevant transaction documents. The Tribunal must reconsider the matter within six months, allowing both parties to submit additional evidence if needed. The questions of law were answered in favor of the Department, emphasizing the necessity for the assessee to prove the genuineness of transactions beyond mere invoices and payment details. The observations made by the Court are tentative and should not influence the Tribunal's decision in the rehearing process.