IMPORTANT POINT
The burden of proof lies upon the assessee to establish the genuineness of the transaction and the actual physical movement of goods for claiming Input Tax Credit (I.T.C.), as per Section 16 and Section 70 of the Act.

JUDGMENT :

1. This is a revision petition filed under Section 58 of the Uttar Pradesh Value Added Tax Act, 2008 (hereinafter referred to as 'the Act') wherein the following questions of law have been admitted by this Court:-

"1. Whether on the facts and circumstances of the case the Commercial Tax Tribunal as well as the 1st Appellate Authority was legally justified in dismissing the appeal filed by the department only on the basis of invoices and bank transactions inasmuch as the transactions have not been proved as a bonafide and genuine transactions otherwise establishing the actual transportation of goods?"

Whether on the facts and circumstances of the case the Commercial Tax Tribunal was legally justified in allowing the claim of I.T.C. especially when the finding of fact has been recorded against the dealer and the benefit has been allowed only on the basis of tax invoices and bank transactions?"

2. The primary issue in the present writ petition is with regard to availment of Input Tax Credit (hereinafter referred to as “the I.T.C.”) by the respondent/assessee.

3. Mr. Bipin Kumar Pandey, learned Additional Chief Standing Counsel appearing on behalf of the revisionist, has submitted that the burden of proof is upon the assessee to show the correctness of the claim of the I.T.C. He relies upon Section 16 of the Act to indicate that such burden is upon the assessee specially with matters, which are within the knowledge of the assessee. Section 16 of the Act is delineated below for better reference:-

"16. Burden of proof

In any assessment proceedings where any fact is specially within the knowledge of the assessee, the burden of proving that fact shall lie upon him, and in particular, the burden of proving the existence of the circumstances bringing the case within any of the exemptions, exceptions or reliefs under any provisions of this Act including claim of any amount as input tax credit, shall lie upon him and assessing authority shall presume the absence of such circumstances."

5. He further relies upon paragraphs 23, 24 and 25 of the Apex Court judgment penned by Justice M.R. Shah in the case of the State of Karnataka vs. M/s Ecom Gill Coffee Trading Private Limited reported in 2023 SCC Online SC 248. The relevant paragraphs of the said judgment are set forth below:-

"23. Thus, the provisions of Section 70, quoted hereinabove, in its plain terms clearly stipulate that the burden of proving that the ITC claim is correct lies upon the purchasing dealer claiming such ITC. Burden of proof that the ITC claim is correct is squarely upon the assessee who has to discharge the said burden. Merely because the dealer claiming such ITC claims that he is a bona fide purchaser is not enough and sufficient. The burden of proving the correctness of ITC remains upon the dealer claiming such ITC. Such a burden of proof cannot get shifted on the revenue. Mere production of the invoices or the payment made by cheques is not enough and cannot be said to be discharging the burden of proof cast under section 70 of the KVAT Act, 2003. The dealer claiming ITC has to prove beyond doubt the actual transaction which can be proved by furnishing the name and address of the selling dealer, details of the vehicle which has delivered the goods, payment of freight charges, acknowledgement of taking delivery of goods, tax invoices and payment particulars etc. The aforesaid information would be in addition to tax invoices, particulars of payment etc. In fact, if a dealer claims Input Tax Credit on purchases, such dealer/purchaser shall have to prove and establish the actual physical movement of goods, genuineness of transactions by furnishing the details referred above and mere production of tax invoices would not be sufficient to claim ITC. In fact, the genuineness of the transaction has to be proved as the burden to prove the genuineness of transaction as per section 70 of the KVAT Act, 2003 would be upon the purchasing dealer. At the cost of repetition, it i