2024 (12) TMI 919 - HC - GST

Denial of the Input Tax Credit - petitioner has not received any goods from the alleged supplier - violation of principles of natural justice - omission of outward and inward E-way bills from the accounts - challenge to assessment order. Denial of the Input Tax Credit - HELD THAT - It is stated in the impugned order that there was no supply of goods or service or both by the supplier viz., Tvl.Thirumuruga Traders to the petitioner, the transactions cannot be genuine as they were based on tax invoices issued without actual receipt of goods or service or both and any claim of Input Tax Credit on the basis of the such transactions cannot be sustained. Omission of outward and inward E-way bills from the accounts - HELD THAT - The question whether a supplier is existing or not, is a disputed question of fact which ought to be decided on the basis of evidence adduced by both assessee as well as the revenue. The examination of such disputed question of facts is foreign to jurisdiction under Article 226 of the Constitution. The impugned order proceeds to reject the petitioner's reply in respect of omissions to generate E-way bills of inward/ outward supply for want of evidence. It is well settled that adequacy or inadequacy or sufficiency of evidence cannot be gone into under Article 226 of the Constitution of India. The challenge to the order of assessment stands rejected. It is open to the petitioner to file an appeal within 2 weeks from the date of receipt of a copy of this order, subject to complying with all conditions relating to appeal, including pre-deposit, if any. If such appeal is filed within the stipulated period i.e., 2 weeks from the date of receipt of copy of this order. The same would be entertained and disposed of in accordance with law after affording the petitioner a reasonable opportunity of hearing. The writ petition stands disposed of.

Summary

Issues:
Challenge to the denial of Input Tax Credit on the ground of non-receipt of goods from the supplier; Compliance with conditions for entitlement to Input Tax Credit; Existence of the supplier and generation of E-way bills for inward and outward supplies.

Analysis:
The petitioner, engaged in trading, challenged the denial of Input Tax Credit (ITC) based on the alleged non-receipt of goods from the supplier, Tvl.Thirumuruga Traders. The petitioner claimed ITC for materials purchased, supported by original invoices and consideration. The authorities rejected the claim, alleging Tvl.Thirumuruga Traders as a bill trader with no actual movement of goods. The petitioner argued that non-compliance by the supplier should not affect their ITC claim, citing relevant case laws. The petitioner requested reasons for labeling the supplier as a bill trader and sought a personal hearing. The authorities found Tvl.Thirumuruga Traders had no business at the registered place, raising doubts on the transactions and ITC claim.

The conditions for claiming ITC under Section 16 of the Act were emphasized, including possession of tax invoices, actual receipt of goods/services, payment of tax by the supplier, and filing of returns by the supplier. The impugned order highlighted the absence of actual supply of goods or services by the supplier, questioning the genuineness of the transactions and ITC claim. The petitioner's counsel argued that E-way bills were the supplier's responsibility for inward supplies, and exceptions existed for not generating E-way bills for outward supplies. The respondent rejected these arguments due to lack of documentary evidence.

The judgment clarified that disputed factual questions, like the existence of a supplier, should be decided based on evidence and are beyond the scope of Article 226 jurisdiction. The order of assessment was upheld, allowing the petitioner to appeal within two weeks, subject to fulfilling appeal conditions. The court disposed of the writ petition without costs, closing the connected miscellaneous petition. The detailed analysis covered the challenges to the ITC denial, compliance with ITC conditions, and the necessity of evidence in disputed factual matters.