The Madras High Court has dismissed a batch of writ petitions and has denied the Input Tax Credit (ITC) citing lack of e-way bills and transport documents.
The bench of Justice C.Saravanan relying on established jurisprudence including the Supreme Court’s ruling in State of Karnataka vs. Ecom Gill Coffee Trading Pvt. Ltd., reiterated the principle that the burden of proof lies with the taxpayer claiming ITC to demonstrate the genuineness of the transaction and the actual receipt of goods.
The bench emphasized that mere possession of invoices is insufficient; corroborative evidence, such as e-way bills, transport documents, and proper maintenance of accounts as per Rule 56 of the CGST Rules, is essential.
The Department fasten the taxability on the respective petitioners/assessee by way of reversal of the Input Tax Credit availed by them on account of purported non-supply of “goods” namely “rubber” and “rubber sheets” to the respective petitioners by the three proprietary concerns registered in the name of the couples namely the Charles and his wife Shanthi. There are no documents to substantiate supply and movement of goods to the petitioners.
The assessees contended that confirmation of the demand without cross-examination of the suppliers amounts to violation of principles of natural justice. The demand confirmed against the petitioners would also amount to double taxation. As far as the movement of goods are concerned, it is submitted that the supplier had utilized their own vehicle to supply the goods to these petitioners and there are documents to substantiate that there was indeed delivery of goods to the respective petitioners.
The department contended that burden of proof is on the petitioners to establish that the credit that was availed by them was valid and until such burden of proof is discharged by the respective petitioners, the credit availed by them is provisional and is liable to be reversed/recovered, if not paid, in the absence of any documents to substantiate the delivery of the goods.
While granting the petitioners liberty to appeal, the court’s decision reinforces the stringent requirements for ITC claims and the taxpayer’s responsibility to provide robust evidence of goods receipt.
Case Details
Case Title: M/s.Devi Traders Versus The State Tax Officer
Case No.: W.P.(MD) Nos.22371, 22372, 22933, 23473, 23474, 23475, 23927, 23928, 23929, 22955, 22956, 22935, 22934, 22957, 23489, 23490, 23491, 23476, 23477 and 23478 of 2023
Date: 24.01.2025
Counsel For Petitioner: N.Sudalaimuthu
Counsel For Respondent: R.Suresh Kumar
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