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Tax Invoice, Eway Bill, GR or Payment Details Not Sufficient To Prove
Physical Movement of Goods: Allahabad High Court Upholds Penalty U/S 74 of GST
Case Summary: M/S Shiv Trading vs. State of U.P. and Others
Case No.: WRIT
TAX No. 1421 of 2022
Court: High
Court of Judicature at Allahabad
Judge:
Hon'ble Piyush Agrawal, J.
Date of Order: 28th
November 2023
Facts of the Case:
M/S Shiv Trading, a
registered proprietorship firm engaged in the business of purchasing and
selling iron machinery parts and hardware, made purchases from M/S Krishna
Trading Company during the 2018-19 period. The petitioner claimed Input Tax
Credit (ITC) based on tax invoices, e-way bills, weighment receipts, and other
documents. However, during an inspection on 24th January 2019, it was
discovered that M/S Krishna Trading Company was non-existent, leading
authorities to conclude that the transactions were fictitious. Consequently,
the tax authorities imposed a demand of ₹45,21,097.75, including tax, penalty,
and interest. The petitioner's appeal against this decision was dismissed by
the Additional Commissioner on 1st June 2022.
Submissions by the
Petitioner:
The petitioner argued
that:
·
They had submitted all necessary
documents, including tax invoices, e-way bills, and weighment slips, and made
payments through banking channels.
·
The authorities wrongly disbelieved these
documents and initiated proceedings despite the documentary evidence provided.
·
The petitioner cited several judgments
from various courts to support their claim that the proceedings were
unjustified.
Submissions by the
Respondent:
The respondent contended
that:
·
The documents submitted by the petitioner,
including weighment slips and bilty, were found to be fake upon inquiry.
·
There was no actual movement of goods, and
therefore, the initiation of proceedings was justified.
·
The burden of proof to establish the
genuineness of transactions and actual movement of goods lies on the
petitioner, as held by the Supreme Court in the Ecom Gill Coffee Trading case.
Findings and Judgement of
the Court:
The court found that the
petitioner failed to prove the actual physical movement of goods and the
genuineness of the transactions. The authorities had rightly initiated
proceedings against the petitioner under Section 74 of the GST Act. The court
referred to the Supreme Court's ruling in the Ecom Gill Coffee Trading case,
which established that the burden of proof lies with the dealer to prove the
correctness of ITC claims. The court dismissed the petition, concluding that no
interference with the impugned order was warranted.
Conclusion:
The High Court of
Judicature at Allahabad dismissed the writ petition, upholding the decision of
the tax authorities due to the petitioner's failure to provide sufficient
evidence of actual physical movement of goods and the genuineness of the
transactions.
Disclaimer: All the Information is based on the notification, circular and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
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