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TMI Blog2018 (2) TMI 373X X X X Extracts X X X X X X X X Extracts X X X X ..... eged breach of principles of natural justice in as much as the adverse material was not confronted to the petitioner and merely on the basis of a Investigation Report, the disallowance of ' Input Tax Credit' was made by the Assessing Authority which too was not supplied to the petitioner-assessee and he was not given an opportunity to controvert the said adverse material namely the alleged Selling Dealer M/s. Rajguru Impex was a bogus dealer or not. 3. Upon issuance of notices, the Respondents- Department has filed its Statement of Objections along with certain documents and it has been stated in para 4 of the said Statement of Objections that that said selling dealer M/s. Rajguru Impex was a bogus and non- existing dealer indulging ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ex is a bogus dealer who is indulging in bill trading and obtained registration in order to claim the benefit of Input Tax Credit by furnishing false invoices. Since the Petitioner has effected purchases from the bogus dealer, the input tax claimed was proposed to disallow by issuing a proposition notice on the petitioner. Responding to the notice, the petitioner had submitted a reply letter in which he sought an opportunity to cross-examine the selling dealer who has filed the returns to ascertain whether there may be suppression at their level. Considering the request of the petitioner, an endorsement dated 27.09.2016 was issued and posted for hearing 04.10.2016 at 11.00 AM in this office. The endorsement issued on the seller was returned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nless goods moved from the seller and purchaser. It is therefore, such purchases do not qualify for Input Tax Credit. There is a well-known settled principle of law by the seller. There must be fund (input tax in this case) for refund (again input tax for setoff from the output tax payable by the petitioner). Thus, the petitioner who has knowingly produced false invoices in order to seek undue Input Tax Credit on purchases made by the bogus dealer." 5. Mr. K.M. Shivayogiswamy, learned counsel for the petitioner-assessee has vehemently submitted before the Court that neither any such Investigation Reports were made available to the petitioner though they were made available to be perused during the course of the assessment proceedings nor t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the petitioner-assessee, such Input Tax Credit cannot be allowed to the petitioner-assessee. 8. Once the allegation was specifically made in the Proposition Notice about the selling dealer M/s.Rajguru Impex being a 'bogus' dealer or a 'ghost' dealer and the Investigation Report was also allowed to be perused by the Assessing Authorities and an Endorsement issued to the said alleged selling dealer M/s.Rajguru Impex was also shown to have been returned back with a postal Endorsement "Addressee left", it was sufficient discharge of burden by the Revenue Authorities to disallow such Input Tax Cred it in respect of the Sales Invoices purportedly raised by M/s.Rajguru Impex and the onus entirely shifted on the petitioner-assessee, to remove s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of the KVAT Act, 2003 or at least he exists to undertake the discharge of such tax obligation on his part. Such false Input Tax Credit given in the hands of the purchasing dealer like the present petitioner-assessee cannot only result in false credits to be allowed in the hands of the dealers which causes loss to the public revenue to the State, but in such cases, the Revenue Authorities are of course empowered to undertake such verification process to its logical end and the petitioner-assessee cannot be held entitled to cut short such process of investigation particularly by invoking the writ jurisdiction of this Court. The writ petitions are thus misconceived and the same are liable to be dismissed and accordingly dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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