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IN THE HIGH COURT OF ALLAHABAD
Hon'ble Rohit Ranjan Agarwal,J.
Trendships Online Services Private Limited – Appellant
Versus
Commissioner Commercial Taxes U.P. At Lucknow – Respondent
JUDGMENT :
Rohit Ranjan Agarwal, J.
1. Petitioner, before this Court, is a registered dealer under U.P. Goods and Services Tax Act, 2017 (hereinafter referred as “U.P. GST, 2017”). It is engaged in providing soil testing services for preparation of soil health guard to Government of U.P.
2. Petitioner made purchase of what-man filter paper required for soil testing from one Shree Radhey International, Delhi, who at the time when the sale was made was also a registered dealer. According to petitioner, payment for entire purchase so made was through the banking channel from March to April, 2018. The goods purchased were against tax invoices and it was declared by petitioner in its GSTR-3B return for the period in question. Input tax credit on output tax liability was claimed and for input tax credit, credit was availed.
3. A show-cause notice dated 06.09.2021 was issued for financial year 2017-18 by Assistant Commissioner, State Tax, Block-3, Jhansi under Section 74(1) of the Act of 2017. A reply was submitted on 05.10.2021, thereafter, an order under Section 74(9) was passed demanding tax/interest and penalty on 17.12.2021. The order was subjected to appeal by petitioner before Addition
Input tax credit claims require proof of actual tax payment by the supplier; failure to demonstrate this results in denial of credit.
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....
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.
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.
Purchasing dealers claiming ITC must prove genuine transactions and actual physical movement beyond invoices or payment details under Section 70 of KVAT Act, 2003.
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 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 with the dealer to establish the genuineness of transactions and actual movement of goods for Input Tax Credit claims under GST.
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