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IN THE HIGH COURT OF JUDICATURE AT PATNA
P. B. BAJANTHRI and ALOK KUMAR SINHA, JJ.
CWJC Nos. 470 with 17613, 17636, 17652, 17654, 17914, 17920, 17922, 18089, 18297, 18326, 18394, 18473, 18497, 18662 of 2023; 15, 136, 211, 312, 343, 345, 356, 430, 542 and 549 of 2024
(11.4.2025)
M/s Sane Retails Pvt. Ltd. (in 470, 18662, 15, 136, 343, 245)
M/s Bathla Teletech Pvt. Ltd. (in 17613, 17636, 17652, 17654)
M/s Utkrisht Trade Solution Pvt. Ltd. (in 17914, 17920, 17922)
M/s Consulting Rooms Pvt. Ltd. (in 18089, 18297, 18326, 18394, 18473, 18497)
M/s Shreyash Retail Pvt. Ltd. (in 211, 312, 356, 430, 542, 549)
vs.
State of Bihar & Ors. ... Respondents(in all)
Bihar Goods and Services Tax Act, 2017 – Section 17(5)(d) – Ineligibility for availing Input Tax Credit (ITC) – Petitioner is stated to have produced all necessary documents – Assessing Officer is required to once again examine what was memorandum of understanding among seller, dealer and what was communication to end consumer insofar as delivery of goods in absence of receipt of goods by petitioner-dealer – Whatever documents demanded by authorities have been furnished from time to time with reference to their show cause notices and other communications – Receipt of goods by dealer from supplier need not be in physical mode – On other hand, if dealer apprise competent authority to the extent that there is agreement / memorandum of understanding among supplier, dealer and intimation to end consumer insofar as transactions of purchase of goods and its delivery to end consumer – Petitioner has made out a case so as to interfere with impugned orders – Impugned orders set aside and matter remanded to Deputy Commissioner of State Tax, to undertake fresh exercise insofar as compliance to Rule 16 (2) (b) of CGST Act only to the extent whether is there any memorandum of understanding between petitioner-dealer with supplier and further with end consumer to the extent of receipt of goods (delivery of goods by supplier directly or through transporter or not). (Paras 15, 16, 20, 22 and 23)
P. B. Bajanthri, J. – In these bunch of petitions, petitioners are stated to be registered dealers. They had claimed Input Tax Credit (for short ‘ITC’) under Section 16 (2) of the Central Goods and Services Tax Act, 2017 (for short ‘CGST Act’) / Bihar Goods and Services Tax Act, 2017 (for short ‘BGST Act’) for a particular period and their claims have been rejected by the Deputy Commissioner of State Tax, Patliputra Circle, Central Division, Patna. Feeling aggrieved by the decision of the aforementioned Officer, they have availed statutory remedy of appeal before the appellate authority viz., Additional Commissioner of State Tax (Appeal), Central Division, Patna. The appellate authority has affirmed the decision of the Deputy Commissioner of State Tax in each of the cases. Hence, each of the petitioners have assailed the decisions of the aforementioned authorities.
2. For the purpose of factual aspects of the matter, the lead case is CWJC No. 17914 of 2023 in the matter of M/s Utkrisht Trade Solutions Pvt. Ltd. vs. The State of Bihar and Others. Brief facts of the case in M/s Utkrisht Trade Solutions Pvt. Ltd. vs. The State of Bihar and Others are as under: –
| Date | Particulars |
| 17.10.2022 | The Petitioner is a company having its principal place of business (“PPOB”) situated at office No. 516, Hari Niwas, Dak Bunglow, MauryaLok, Patna and is engaged in the business of trading in consumer goods including technology equipment’s lifestyle products, electronic items, home appliances, home décor etc. across India including State of Bihar. |
| 18.10.2022 | An inspection was carried out by the Respondent at PPOB and additional place of business (“APOB”) of the Petitioner under Section 67 of the CGST and SGST Act, prima facie on the reason that the entire output tax liability for the relevant period were paid by the Petitioner by way of ITC and not cash ledger. (Annexure -6) |
| 04.11.2022 | Summon under Section 70 of the CGST Act was issued by the Respondent No. 1 to the director of the Petitioner to give evidence and produce the relevant documents for the period December 2017 to 25.08.2022. (Annexure-7) |
| 25.11.2022 | The Petitioner replied to the above summon and submitted the requested documents before the Respondent No. 2 (Annexure-8) (Annexure-9) |
| 29.11.2022 | Intimation and statement of liability of the tax was served upon the Petitioner by Respondent No. 2 in GST-DRC-01. (Annexure-10) |
| 12.12.2022 | The Petitioner replied the aforesaid intimations in Part B of GST DRC-01A as per Rule 142(2A) of the CGST Rules disputing the entire amount of tax demanded by the Respondent No. 2. (Annexure-11) |
| 13.12.2022 | Summary of show cause notices in GST DRC-01 and the show cause notices (“SCNs”) under Section 73(1) of the Act for the relevant period was served upon the Petitioner. (Annexure-12) |
| 12.01.2023 | The Petitioner replied to the aforesaid SCN once again disputing the entire tax demanded by the Respondent No. 2 (Annexure-13) |
| 14.01.2023 | The Respondent No. 2 passed the Orders under Section 73(9) of the CGST Act for the relevant period and directed the Petitioner to deposit the tax due amounting Rs. 26,14,086/- Rs. 7,45,014/- and Rs. 2,61,410/- (Annexure-14) |
| 20.02.2023 | Recovery proceedings under Section 79 was initiated by the Respondent No. 2 by issuing FORM GST DRC-13 to the bank of the Petitioner. (Annexure-15) |
| 25.02.2023 | The Petitioner requested Respondent No. 2 to remove lien created on the bank accounts and also submitted that the statutory timeline to file the appeal against the Adjudication Order has not lapsed. (Annexure-16) |
| 09.03.2023 | The Petitioner being aggrieved of the Order, filed an appeal before the Respondent No. 2 under Section 107 of the CGST Act. (Annexure-17) |
| 11.08.2023 | The Respondents filed r |
Dealers claiming input tax credit must establish genuine transactions and physical movement of goods with adequate proof; failure to do so may result in disallowance and recovery proceedings under th....
Input tax credit claims require proof of actual tax payment by the supplier; failure to demonstrate this results in denial of credit.
Legislative provisions imposing conditions on Input Tax Credit eligibility based on supplier compliance are found iniquitous; bona fide purchasers must not be unduly penalized for supplier defaults.
The burden of proof lies with the dealer to establish the genuineness of transactions and actual movement of goods for Input Tax Credit claims under GST.
Purchasing dealers claiming ITC must prove genuine transactions and actual physical movement beyond invoices or payment details under Section 70 of KVAT Act, 2003.
A registered person is not entitled to input tax credit if the claimed supplies are from non-existent firms, regardless of the validity of the supplier's GST registration at the time of transaction.
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