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TMI Blog2019 (5) TMI 1529X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to the fact that at the time when the assessment order was made, the petitioners did not have the copies of the assessment orders made in the case of the vendors, the petitioners did not have any opportunity to prove the genuineness of such transactions. Subsection (7A) of section 11 of the GVAT Act envisages disallowance of tax credit in excess of the amount of tax paid in respect of the same goods. Therefore, to disallow tax credit on any purchase, it has to be established that it is in respect of the very goods purchased by a dealer that the tax has not been paid. Input tax credit cannot be disallowed by working out the percentage of purchases made from a dealer whose registration is cancelled, without first establishing that in respect of the goods purchased by the dealer, the vendor had not paid tax. The court is of the view that the petitioners have made out a strong primafacie case in their favour - the Tribunal and the first appellate authority were not justified in directing payment of huge amount of predeposit for the purpose of admitting the appeal and staying recovery. Petition allowed. - R/SPECIAL CIVIL APPLICATION NO. 1174 of 2019 - - - Dated: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed on the basis that the registrations of the persons from whom the petitioners had made purchases had been cancelled. It was urged that the disallowance of input tax credit being based upon extraneous material, such material ought to have been furnished to the petitioners. It was contended that after the order of the Tribunal dismissing the appeal on the ground of nonpayment of predeposit, the petitioners contacted their vendors and tried to find out the reason for the alleged demand in their cases, whereupon replies were received that tax in respect of the sales to the petitioners had been duly deposited. It was submitted that out of the four vendors in respect of whom input tax credit came to be disallowed, two of them, namely, M/s.Ardor Global Private Limited and M/s. Infinium DeChem Private Limited have responded that in fact they do not have any outstanding dues as per the assessment orders passed for the year 2013-14. It was pointed out that insofar as as VAT demand in case of Chem Edge International Pvt. Ltd. is concerned there was meager demand of ₹ 4831/but not related to sales to the petitioner and that insofar as Ardor International Private Limited is concerned, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of the transactions with Capital Traders, viz., the petitioner herein. It was submitted that the tax dues of Ardor International Limited come to ₹ 9,37,45,486/and that Ardor International Limited's Value Added Tax TIN (Tax Identification Number) has been cancelled on 1.1.2017. No affidavit in reply is filed on behalf of the respondents. 5.1 Mr. Sharma further submitted that it was for the petitioners to clarify that the transactions with the four parties were legal and proper and that there were no irregularities or infirmities in these transactions by furnishing the details during the course of assessment. It was submitted that the petitioners were given ample opportunities by the Assessing Officer but the petitioners having failed to furnish the required details, no blame be laid at the door of the assessing authority. It was, accordingly, urged that the petition being devoid of merits deserves to be dismissed. 6. The sole question that arises for consideration in the present case is as to whether the first appellate authority and the Tribunal were justified in directing the petitioners to make predeposit in terms of the orders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the GVAT Act. 9. By letter dated 27.11.2018, Mr. Fenil Shah, ExDirector of Chem Edge International Ltd. has informed that the tax in respect of sales to the petitioner is deposited. There is a meager demand of ₹ 4831/as per the assessment under the VAT Act not in relation to the sales to the petitioner. By a letter dated 27th November 2018 of Shri Fenil Bharatbhai Shah, ExDirector of Ardor International Private Limited., the petitioners have been informed that during the year 2013-14 M/s. Ardor International Pvt. Ltd. had sold goods to the petitioners amounting to ₹ 219,43,23,453/. These sales were recorded in the books of account of the company and duly reported in the returns regularly submitted by the company under the GVAT Act. The tax payable under the GVAT Act as per the returns of the company was also duly paid by the company. It is further stated that the company has been assessed for the year 2013-14 under the GVAT Act and as per the assessment order, the total dues against the company were ₹ 68,36,74,990/. A copy of the assessment order is also annexed along with the letter. It is further stated in the letter that almost the entire inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the transaction between the petitioner and M/s Lucky Enterprises in light of the observations made herein above, therefore, the matter is required to be remanded to the adjudicating authority to consider the claim of the petitioner for ITC on the alleged purchases made by the petitioner from M/s Lucky Enterprises. 12. In the opinion of this court, the above decision would be squarely applicable to the facts of the present case. Having regard to the fact that at the time when the assessment order was made, the petitioners did not have the copies of the assessment orders made in the case of the vendors, the petitioners did not have any opportunity to prove the genuineness of such transactions. 13. As can be seen from the assessment order, the Assessing Officer has placed reliance upon section 11(7A) of the GVAT Act for disallowing input tax credit to the petitioners. Section 11(7A) of the GVAT Act reads as under:- Notwithstanding anything contained in this section, in no case the amount of tax credit on any purchase of goods shall exceed the amount of tax in respect of the same goods, actually paid, if any, under this Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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