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IN THE HIGH COURT OF JUDICATURE AT MADRAS
Honourable Mr Justice C. SARAVANAN
Tvl.R.M.K.Enterprises, Represented by its Proprietor Mr. R. Malik – Appellant
Versus
State Tax Officer, Central Intelligence Cell, Intelligence – II, Chennai – Respondent
ORDER :
The petitioner is before this Court against the respective Assessment Orders all dated 03.02.2021 confirming the demand of GST for the Assessment Years 2017-2018, 2018-2019, 2019-2020.
2. The petitioner appears to be a dealer in scrap steel and had transactions with the following dealers during the respective Assessment Years:
| Sl.No. | Assessment Years | Dealer's Name |
| 1 | 2017-2018 | Tvl.R.R.Trading |
| 2 | 2018-2019 | Tvl.Asian Steels |
| 3 | 2019-2020 | Tvl.Lucky Scrap Traders |
3. Details of the credit availed by the petitioner from different dealers are as under:-
| Sl.No. | W.P.Nos and Assessment Years | Name and GSTIN (As per impugned order) | ITC Availed |
| 1 | W.P.No.10966 of 2021 (2017-2018) | 1. Tvl.RR Trading & Co (33EDYPS0948Q1ZC) | Rs.75,44,264/- |
| 2. Tvl.Asian Steel Traders (33AMDPS4215Q1ZQ) | Rs.13,38,994/- | ||
| 3. Tvl.Lucky Scrap Traders (33BKXPA5853M1ZL) | Rs.7,28,200/- | ||
| 2 | W.P.No.10968 of 2021 (2018-2019) | 1. Tvl.RR Trading & Co (33EDYPS0948Q1ZC) | Rs.59,68,106/- |
| 2. Thangam Steel (33FRRPS2935B1ZL) | Rs.41,21,864/- | ||
| 3. Asian Steel (33AMDPS4215Q1ZQ) | Rs.83,38,560/- | ||
| 4. Gayathri traders (33BBTPA4294F1ZM) | Rs.7,63,272/- | ||
| 5. Steel World (33BGMPA9161P1ZY) | Rs.3,21,304/- | ||
| 6. Sun Steel (33BHDPP5225K1ZB) | Rs.1,07,060/- | ||
| 7. Aarthi Enterprises (33BRDPG6857J1ZL) | Rs.1,58,148/- | ||
| 8. | |||
Input Tax Credit claims cannot be denied without adequate evidence and consideration of the principles of natural justice as established in the Central Goods and Services Tax Act.
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 requires valid documentation proving the physical movement of goods; the burden of proof lies with the assessee to substantiate claims, and penalties are subject to careful assessmen....
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.
The first respondent was not justified in reversing the ITC availed by the appellant without conducting any enquiry on the supplier and without resorting to any action against the supplier.
The burden of proof lies on the recipient to establish the legitimacy of Input Tax Credit claims, necessitating evidence of actual goods received, which failed in this case.
The court held that input tax credit cannot be denied based on the seller's retrospective registration cancellation when the transaction occurred while the seller was registered.
The denial of Input Tax Credit requires verification of the supplier's tax payment, and unilateral action against the recipient without such verification is arbitrary.
The rejection of refund applications cannot be solely based on suspicion without conclusive evidence. The petitioner is entitled to the refund of ITC on goods exported by it.
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