2022 (2) TMI 1116 - HC - VAT and Sales Tax

Input tax credit - grant of benefit of input tax credit to the dealer without verifying the nature of transaction as discussed by the assessing authority as well as by the first appellate authority - HELD THAT - The record reveals that the purchases have been disbelieved by the Assessing Authority on the basis of some information received from the Special Investigation Officer. On the said information purchases shown by the opposite party was treated to be purchases from unregistered dealer and, therefore, rejected the claim of input tax credit - the first appellate authority being the court of fact ought to have verified the said information but instead of doing so, has remanded the matter. The second appeal filed by the opposite party. The Tribunal has recorded the finding of fact after verification from the official web site that during the relevant period purchases shown by the dealer from the parties were duly registered and all the payments were made through bank. The Tribunal being the last court of fact has recorded the finding of fact in favour of the opposite party that all the transactions were made through Bank and were duly accounted for as well as verified. Further, the purchases made from the respective dealers were duly registered and verifiable from the official web site of the Department and therefore, it cannot be said that purchases were made from unregistered dealers. There are no reason to interfere with the order of the Tribunal - revision dismissed.

Summary

Issues:
Challenging the grant of input tax credit by the Commercial Tax Tribunal without verifying the nature of transactions.

Analysis:
The judgment involves four revisions against a common order passed by the Commercial Tax Tribunal for different sections of tax acts and one revision against a separate order for a different assessment year. The common question raised in all five revisions is whether the Tribunal was justified in granting the benefit of input tax credit without verifying the nature of transactions. The opposite party, a registered dealer in the business of iron and steel, faced rejection of input tax credit by the Assessing Authority due to purchases from unregistered dealers. The first appellate authority allowed the claim, leading to a second appeal and subsequent revision.

The standing counsel argued that the input tax credit was disbelieved based on information from the Special Investigation Officer, but the Tribunal wrongly allowed the claim without proper verification. On the contrary, the counsel for the opposite party contended that all purchases were made through registered dealers with transactions conducted via banks, verified by the Tribunal. The Court examined the record and noted that the Assessing Authority rejected the claim based on information received, which was not verified by the first appellate authority. The Tribunal, as the last court of fact, found that purchases were made from registered dealers, payments were through banks, and transactions were duly accounted for, leading to the dismissal of the revisions.

The Court referenced previous cases to support its decision, highlighting that the Tribunal's findings were in favor of the opposite party, indicating no legal question arose for consideration. Considering the facts, the law, and the established findings, the Court found no grounds to interfere with the Tribunal's order, resulting in the dismissal of all revisions.