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TMI Blog2016 (6) TMI 630X X X X Extracts X X X X X X X X Extracts X X X X ..... x credit shall lie on the dealer. It is for the petitioner, in reply to the show cause notice issued by the assessing authority, to prove that the goods were physical delivered to him by the 6th respondent, and the mode and manner in which they paid the sale price to the 6th respondent; and to satisfy the assessing authority that, notwithstanding failure of the selling VAT dealer to disclose the turnover (representing the sale of goods by them to the petitioner) in their returns, the goods had, in fact, been sold to them. Maintainability of writ petition - Held that:- In the exercise of its jurisdiction, under Article 226 of the Constitution of India, this Court would not sit in appeal over the findings of fact recorded by the assessing authority, or cause a roving enquiry as to whether or not the selling VAT dealer had deliberately suppressed the turnover in their returns after effecting sales to the petitioner herein, or to examine whether or not the petitioner had taken delivery of the subject goods and had paid the sale consideration to the 6th respondent. This Court would also not substitute its views for that of the assessing authority. It is only if the impugned order suffer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... declared by the dealer; to ascertain the genuineness of the input tax credit claimed by them, he had cross checked with the references in Form 311 issued by the jurisdictional Commercial Tax Officers of the selling dealers; verification of the reports, received from the jurisdictional Commercial Tax Officer, revealed that the selling dealer (6th respondent) had not effected sales of edible oils of ₹ 1,24,94,015/- to the petitioner; and hence the ITC claim of the petitioner for ₹ 6,24,701/-, on the said transactions, was proposed to be disallowed. Thereafter, the assessing authority passed an assessment order in VAT 305 dated 27.07.2015 wherein, after referring to the contents of the earlier show cause notice issued by him, he stated that the show cause notice was served on the petitioner-dealer calling for their written objections if any, against the proposed tax, within seven days from the date of receipt of the notice; the notice was served on the dealer on 16.07.2015; the dealer did not file any objection to the proposed tax within the stipulated time; it was hence presumed that they did not have any objections to offer; and the tax liability, proposed in the show c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purchases made by the assessee from real and identifiable sellers within the State whose registration number was mentioned in the bills; in respect of some other dealers whose registration numbers were mentioned, the Deputy Commissioner had disallowed the exemption for want of sufficient record; on verification by the Tribunal they were found to be real and identifiable dealers and, therefore, the Tribunal had granted exemption; in respect of some others, even the Tribunal came to the conclusion that, although certain registration numbers of the dealers were mentioned in the bills, they were not real and identifiable dealers within the State and, on that basis, he had disallowed the exemption claimed by the assessee; in so far as the assessee's claim was allowed by the Tribunal, the department had filed T.R.C, and in so far as the assessee's claim was disallowed the assessee had filed T.R.C; and both the T.R.C, must be dismissed. In B. Narasaiah & Co. v. State of A.P. (AP) (2002) 127 STC 606a Division Bench of this Court held:- "….. This Court in State of A.P. v. Thungabhadra Industries Ltd. dealing with a claim of registered dealer, who claimed as a second se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit; the impugned order of assessment did not assert that the invoices produced by the petitioner were fraudulent or had not been issued by M/s. Karat 24 or that the purchaser did not, in fact, obtain the invoices from the registered dealer; and it was also not disputed, and in fact was conceded in the order of assessment, that the registration of M/s. Karat 24 was cancelled on February 28, 2010, i.e., after the transaction in question occurred whereunder the petitioner had purchased bullion from the registered dealer, and had produced the vouchers. Section 13 of the Act relates to credit for input-tax and under sub-section (1) thereof, subject to the conditions if any prescribed, an input tax credit shall be allowed to the VAT dealer for the tax charged in respect of all purchases of taxable goods, made by that dealer during the tax period, if such goods are used in the business of the VAT dealer. Section 13(3) enables a VAT dealer to claim (a) input tax credit, under sub-section (1), on the date the goods were received by him provided he was in possession of the tax invoice. Section 14 relates to tax invoices and, thereunder, a VAT dealer, making a sale liable to tax to anot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ealer to another VAT dealer. In view of the requirement of Section 14 of the Act, it is only in cases where there is a sale of goods, liable to tax under the Act, by one VAT dealer to another is the former required to issue a "tax invoice" to the latter. Among the details, required to be furnished in the "tax invoice" in terms of Rule 27(1), are the description of the goods supplied and the quantity or volume of the goods sold. The mere fact that the dealer is in possession of the tax invoice does not preclude the assessing authority from ascertaining whether the selling dealer had, in fact, sold the goods to the purchasing dealer; whether there was physical delivery of such goods; whether the "tax invoice" was issued by a registered VAT dealer; whether or not the transactions of sale were genuine, etc. If, on enquiry, the assessing authority is satisfied, on the basis of the material evidence on record, that there has been no sale of goods, or the tax invoice was not issued by the VAT dealer, or that there was no physical delivery of goods, or that inter-state purchases had been suppressed and bogus tax invoices were raised as if the said goods had been purchased by the dealer wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in dispute that the petitioner did not even choose to reply to the show cause notice, let alone establish the genuineness of the transactions. While nonpayment of tax, by a registered VAT dealer, on the sale of goods by him to the purchasing VAT dealer, may not disentitle the purchasing VAT dealer from claiming input-tax credit, the assessing authority, in the present case, has, on the basis of the material on record, opined that the selling VAT dealer has not even disclosed the said turnover in their returns. The petitioner could have discharged the onus placed on them, under Section 16 of the A.P. VAT Act, by adducing evidence before the assessing authority to show that, notwithstanding the failure of the selling VAT dealer to disclose the turnover in their returns, the said transaction is a genuine sale transaction, evidenced by physical delivery of the goods; and that payment was made by the petitioner to the 6th respondent for the goods purchased by them. The petitioner has not even chosen to submit their reply to the show cause notice, much less adduce any oral or documentary evidence in this regard. In the exercise of its jurisdiction, under Article 226 of the Constitutio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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