9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (10) TMI 114 - HC - GSTValidity of the impugned order u/s 107(11) of the Karnataka Goods and Services Act, 2017 - case of petitioner is that the adjudicating authority without resorting to any action against the supplier who was the selling dealer, has ignored the tax invoices produced, ignored the payment of tax and has gone against the purchaser, which is illegal, arbitrary, and the same is liable to be quashed - HELD THAT - In the present case after it was found by the revenue that there were certain violations/anomalies by the supplier and the dealer with regard to payment of tax returns audit was conducted. By virtue of the judgment in the case of THE STATE OF KARNATAKA VERSUS M/S ECOM GILL COFFEE TRADING PRIVATE LIMITED 2023 (3) TMI 533 - SUPREME COURT , it is held that the purchasing dealers have to prove the actual physical movement of the goods unless they have been purchased from their respective dealers and if the respective purchasing dealer fails to establish and prove the important aspect of physical movement of the goods alleged to have been purchased from the concerned dealers on which the ITC has been claimed, the Assessing Officer is absolutely justified in rejecting such ITC claims, though in the present case the petitioner has produced documents to show that there is existence of the supplier and he is continuing his business by virtue of a separate GST number and has also now produced along with a memo photograph showing some of the godowns belonging to the supplier. The fact remains that the goods that was moved and purchased from the supplier to the purchaser, the vehicles in which it was moved have not been traced and those appear to be fraudulent and not registered before the Regional Transport Authority. Therefore, the provisions of section 16 (2) (c) (d) is squarely applicable to the case on hand. Whether the tax charge in respect of supplier actually has been paid to the Government, either in cash or through utilization of Input Tax Credit admissible in respect of the said supply would have to be proved by the purchaser as contemplated under section 155 of the Act, which says where any person claims that he is eligible for Input Tax Credit under this Act, the burden of proving such claim shall lie upon such person. The law contemplates that the supplier ought to have filed the returns and paid the tax and if he has stopped payment of tax, the revenue is at liberty and by law entitled to recover from the purchaser, initiate proceedings against the purchaser in accordance with law and the ITC claimed by the petitioner ought to have paid to the Government by the supplier for having paid the tax to the revenue. Hence the same has been rightly rejected by the Assessing Officer which is confirmed by the appellate authority. Therefore, there are no anomaly, illegality or discrepancy in the order passed by the appellate authority confirming the order of the respondent No.7. The order that is questioned herein is not tainted with any malice, arbitrariness, illegality or capriciousness - the writ petition lacks merit for consideration. Petition dismissed.
Issues Involved:
1. Validity of the impugned order in Appeal No.GST-15/22-23. 2. Legality of the demand and endorsement letters issued by the respondent. 3. Compliance with Section 16(1) and 16(2)(c) of the CGST/KGST Act. 4. Burden of proof under Section 155 of the GST Act. 5. Applicability of judgments and precedents cited by both parties. Detailed Analysis: 1. Validity of the Impugned Order in Appeal No.GST-15/22-23: The petitioner questioned the validity of the impugned order dated 23.05.2023 passed by respondent No.5 under Section 107(11) of the Karnataka Goods and Services Act, 2017. The petitioner argued that the order was illegal, arbitrary, and contrary to existing circulars and instructions issued by the GST Council. The court found that the appellate authority had dismissed the petitioner's appeal and affirmed the order of the Assessment Officer (respondent No.7), who had identified discrepancies between the GSTR-3B and GSTR-2A forms and issued a demand notice accordingly. 2. Legality of the Demand and Endorsement Letters: The petitioner sought to quash the demand letter dated 15.07.2023 and the endorsement letter dated 10.08.2023, arguing that no recovery or investigation steps were initiated against the defaulted suppliers before initiating proceedings against the petitioner. The court noted that the respondent had conducted an audit under Section 65 of the KGST Act and discovered that the suppliers had not filed their respective GST returns, leading to a demand for recovery from the petitioner. 3. Compliance with Section 16(1) and 16(2)(c) of the CGST/KGST Act: The petitioner contended that they had complied with Section 16(1) of the Act by availing input tax credit for the financial year 2017-18. However, the court found that the suppliers did not file their GST returns and did not remit the applicable output taxes to the government, thereby violating Section 16(2)(c). The court emphasized that the burden of proving the eligibility for input tax credit lies on the petitioner under Section 155 of the Act. 4. Burden of Proof under Section 155 of the GST Act: The court reiterated that under Section 155, the burden of proving eligibility for input tax credit lies on the claimant. The petitioner failed to demonstrate that the tax charged by the suppliers was actually paid to the government. The court referred to the Supreme Court judgment in the case of "The State of Karnataka v. Ecom Gill Coffee Trading Private Limited," which held that the burden of proving the correctness of the ITC claim is on the purchasing dealer. 5. Applicability of Judgments and Precedents: The petitioner relied on several judgments, including "Assistant Commissioner of State Tax v. Suncraft Energy (P) Ltd." and "Lokenath Construction Private Limited v. Tax/Revenue Government of West Bengal." However, the court found these judgments inapplicable as they did not consider the Supreme Court's ruling in "Ecom Gill Coffee Trading Private Limited." The court also referred to judgments cited by the respondents, including "M/S Malik Traders v. State of U.P.," which supported the respondent's position. Conclusion: The court concluded that the petitioner failed to prove the actual physical movement of goods and the genuineness of the transactions. The court upheld the impugned order, stating that the revenue authorities had acted within their rights to demand recovery from the petitioner due to the suppliers' failure to remit taxes. The writ petition was dismissed, and the court found no illegality or arbitrariness in the actions of the respondents. Order: The writ petition is dismissed.
|
