The Delhi High Court has held that the Chartered Accountant (CA) certificates certifying no common input credit was availed for certain periods could not be rejected without evidence of forgery.
The bench of Justice Prathiba M. Singh and Justice Shail Jain has dismissed an appeal filed by the Commissioner of CGST, South Delhi, upholding a Customs, Excise and Service Tax Appellate Tribunal (CESTAT) order that granted relief to Verifone India Sales Pvt. Ltd. in a long-running service tax dispute worth over Rs. 4.26 crore.
The case arose from a show cause notice issued in September 2015 covering the period February 2010 to 2014–15. Authorities alleged that Verifone failed to reverse CENVAT credit on exempted services as required under Rule 6(3) of the CENVAT Credit Rules, 2004, and also claimed credit based on photocopied documents. The original adjudication in December 2018 had confirmed the service tax demand of ₹4,26,09,828, along with interest and equivalent penalty, plus ₹8.19 lakh for credit allegedly availed without valid documentation.
On appeal, CESTAT examined key evidence presented by the respondent assessee. Chartered Accountant Certificates for the period October 2012 to March 2015 certified that no common input service credit was availed for exempt services. The tribunal ruled such certificates could not be rejected without proof of forgery or falsity. Regarding the alleged credit on photocopies, Verifone produced a letter dated March 11, 2014, acknowledged by the Service Tax Range Office, evidencing submission of original invoices. CESTAT held that unless proven fake, such acknowledgment should be accepted. On limitation, CESTAT found that the extended period was wrongly invoked since the department had audited Verifone’s statutory records comprehensively over several days in 2012. Regular audits and returns meant suppression of facts could not be alleged.
The court held that the tribunal’s reasoning was sound and no substantial question of law arose. The court stressed that tax authorities cannot summarily dismiss Chartered Accountant certificates or documentary evidence without credible proof of falsity, and that the extended limitation period cannot be applied when records are regularly audited.
Case Details
Case Title: Commissioner Of CGST South Delhi Versus Verifone India Sales Private Limited
Case No.: SERTA 13/2025
Date: 04.08.2025
Counsel For Petitioner: Atul Tripathi
Counsel For Respondent: None
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