The taxpayer must substantiate claims for input tax credit with adequate proof of genuine transactions; failure to do so justifies the cancellation of GST registration.

ORDER :

C.SARAVANAN, J.

In this Writ Petition, the Petitioner is before this Court challenging the order dated 27.01.2025 passed in Appeal No.AP/GST/4237/2024, whereby, the petitioner’s appeal against the order dated 29.11.2024 has been rejected. Earlier, by the order dated 29.11.2024, the petitioner’s GST registration was cancelled.

2. The reasons given for cancellation of the petitioner’s GST registration in the order dated 29.11.2024 are as follows:-

“The relevant facts mentioned in the reply by the petitioner are partially and certain vita details have been conveniently omitted. The Authorized Representative has submitted documents (soft copy-pen drive) during personal hearing but has not filed documents regarding supplier wise payment details with connected expenses.

On verification of their sales invoices, it was found that in many of the sales invoices and e-way bill, they have not mentioned the vehicle numbers transporting the goods, it was mentioned as TMYCYCLE/TRICYCLE without any motor vehicle Registration and part B of the EWB not update which is suspicious.

PROPER OFFICER DECISION:

This order is issued without prejudice to any other action that may be taken against the taxpayer in relation to the impugned matter under the TNGST Act , 2017 and/or any other GST law for the time being in force in India.

Ample opportunities have been provided to the taxpayer regarding the above proposals. The following orders were passed after careful perusal of the available documents to finalize the GST registration and consideration of the taxpayer's reply letter uploaded on the GSTIN portal.

I have carefully gone through the Show Cause Notice dt.11.11.2024, the written replies vide letter dt. 21.11.2024 along with the documents (soft copy-pen drive) submitted by the taxpayer, the relied upon data/documents made available during the given point of time along with the statutory provisions of each GST Act and Rules. I have given my earnest consideration to the facts and circumstances of the case, evidence available on record and written contents of the SCN. The issues to be decided in this case are: -

MISUSE OF INPUT TAX CREDIT (INWARD SUPPLIES)

The registered person (Tvl. Sri Balajee Udyog) has filed GSTR-3B for the period of 2022-23 and has taken and utilized ITC. As per the table shown above where Input Tax Credit has been wrongly availed or utilized by the Tax Payer under SGST and CGST Act as mentioned above, it was contravention to the provisions of Act under section 16 of the TNGST Act , 2017.

Without actual physical movement of goods or genuineness of transaction, the input tax credit cannot be availed. The taxpayer is duty bound to prove beyond any reasonable doubt and establish that actual transaction took place and merely furnishing the details of copy of tax invoices, ledger account and Bank statement is not sufficient.

The actual physical movement of goods and genuineness of transportation by furnishing details as referred above and in the event such details are not being furnished, the benefit of input tax credit cannot be accorded.

In support, the judgment of Hon'ble the Apex Court in the case of State of Karnataka Vs. M/s Ecom Gill Coffee Trading Private Limited (Civil Appeal No. 230 of 2023, decided on 13.03.2023) as well as Patna High Court in M/s Aastha Enterprises Vs. State of Bihar (Civil Writ Jurisdiction Case No. 10395 of 2023) decided on 18.8.2023 in which it has been held that the burden to prove the actual physical movement of the goods is upon the purchasing dealer for availment of input tax credit.

The benefit of Input Tax Credit under the tax statute can be availed only on fulfilment of certain conditions or restrictions as stipul